Pushed by Covid-19, one of emerging Europe’s most cash-heavy economies is moving online.
In Ukraine, the share of digital, non-cash transactions — in total volume of transactions using payment cards — increased from 25 per cent in 2014 to nearly 50 per cent in late 2019, according to the National Bank of Ukraine. This year, triggered by the Covid-19 pandemic, during which the use of cash has been actively discouraged across many countries in the emerging Europe region, internet banking has also been on the rise, with around 60 per cent of the country’s population now able to access financial products and services via the digital identification system, according to Ukraine’s ministry of digital transformation.
However, the quality of digital financial services in Ukraine requires further enhancements.
In order to bring such enhancements about, the International Finance Corporation (IFC), a member of the World Bank Group, this week announced that it will be working with the National Bank of Ukraine to develop a national financial inclusion strategy aimed at improving access to digital financial services, creating jobs and boosting the country’s economic growth.
To drive the country’s progress in this area, the IFC Ukraine Financial Inclusion for Growth Programme — in partnership with the Swiss State Secretariat for Economic Affairs (SECO) and the UK government’s Good Governance Fund — will support the National Bank of Ukraine to create a national financial inclusion roadmap, expanding responsible access and usage of financial services.
“Our goal is to secure Ukraine’s citizens with maximum access to financial services and products. We have no right to leave anyone behind. Our joint efforts will impact the country we will live in the future: a comfortable, financially inclusive, and modern country or the one where the majority of population is outside the country’s financial system,” says Kyrylo Shevchenko, chairman of the National Bank of Ukraine.
Moving forward, the National Financial Inclusion Strategy will ensure the development of remote channels of financial services, including payments, digital financial services, access points, and others. It will further help expand a range of financial services and protect consumer rights. The process will involve discussions with the ministry of finance and ministry of digital transformation, local financial institutions, payment providers, and other financial market players in order to support the design and development of an action plan for the National Financial Inclusion Strategy.
“Implementation of a well-designed financial inclusion strategy will help Ukraine expand access to financial services. This is essential, particularly now given the economic crisis triggered by the pandemic,” says Jason Pellmar, IFC regional manager for Ukraine, Belarus, and Moldova. “This engagement is core to our strategic partnership with the National Bank of Ukraine and our shared objective to boost the resilience of the country’s financial system, inspiring confidence in the financial sector.”
In addition to developing the National Financial Inclusion Strategy, IFC’s partnership with the National Bank of Ukraine will also help create competitive market conditions for financial service providers and improve the country’s credit reporting system. This should help decrease transaction costs for customers, thereby supporting business growth in digital financial services.
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