Business

Ukrainians are taking fewer microloans now than before the full-scale war. But debts are growing

Ukrainians took out almost 6 million loans from microfinance organizations totaling UAH 37.11 billion in 9 months of 2024. The average loan amount increased by 1.3 times compared to the same period last year to UAH 6,190. And the total debt on microloans has almost doubled since the beginning of the year. Such data is provided by the Opendatabot platform, Komersant ukrainskyi reports.

Although the number of loans remained almost unchanged compared to last year, the amount of loans disbursed increased by 1.3 times.

Over the year, the average microloan amount increased by 28%: from 4,830 UAH ($126) last year to 6,190 UAH (approximately $150) this year. It is worth noting that compared to 2021, the amount of a microloan in equivalent terms has even slightly decreased: at that time, Ukrainians borrowed an average of $168.

670 thousand agreements are concluded on average every month this year, the same as last year. For comparison, in 2021, this figure reached 1.2 million per month.

Opendatabot notes that 90% of microloans this year are taken out online, and most agreements were concluded for a period of 3 months to 1 year.

Since the beginning of this year, the total amount of Ukrainians’ debt on microloans has increased 1.7 times: from UAH 9.3 billion to UAH 16.02 billion.

What is the overall picture of lending in Ukraine?

The NBU has recorded an increase in net hryvnia loans, which has been going on for a year and a half in a row. At the same time, lending to individuals grew at the pace of the previous quarter, while lending to businesses grew somewhat slower. This is stated in the Banking Sector Review for the third quarter of 2024.

It is noted that the volume of the customer loan portfolio grew by 22.4%. The share of small and medium-sized enterprises in the net portfolio of hryvnia business loans increased to 60%.

Banks of all groups increased their corporate loans, with private banks growing the fastest. Loans to wholesale trade and the agricultural sector grew the most.

Further improvement in lending conditions is contributing to the increased lending. However, the share of loans under the program “Affordable Loans 5-7-9%” in the hryvnia gross operating portfolio declined to about 34%.

The volume of the net hryvnia retail loan portfolio is also growing: the increase in the third quarter was 9.7% compared to the previous quarter and 40.7% compared to the third quarter of 2023.

Mortgage growth slowed slightly compared to previous periods. Almost all mortgage lending continues to be carried out under the state program “eHouse”, whose gross portfolio increased by UAH 3.5 billion to UAH 21.3 billion in the third quarter. The share of real estate loans increased to 13.4% of the net hryvnia retail loan portfolio.

According to the NBU, the quality of the loan portfolio has been improving for more than a year across the banking system.

What are the expectations of lenders?

In the fourth quarter of 2024, Ukrainian banks expect an increase in demand for all types of retail loans, as well as for all types of corporate loans, except for loans in foreign currency. This conclusion is based on the Bank Lending Conditions Survey conducted by the NBU in September-October this year.

In the third quarter, for the first time since 2021, banks eased lending standards for businesses. This relaxation applied to all types of corporate loans, except for foreign currency loans. And by the end of the year, banks plan to ease credit standards for all types of corporate loans. There have also been announcements of intentions to ease credit standards for consumer loans and tighten them for mortgages.