Home Resilience Ukraine fintech push aims to help SMEs with digital finance

Ukraine fintech push aims to help SMEs with digital finance

Kiev, Ukraine: ‘Strategy of Ukrainian Financial Sector Development Until 2025’ sets out a reform agenda | Credit: Артём Апухтин; Pixabay

A UK- and Swiss government-backed push to help the fintech sector in the Ukraine is putting the focus on helping small- and medium-sized enterprises (SMEs) to understand and capitalise on digital finance.

A financial literacy ‘toolkit’ for SMEs, as well as exploration of the possibility of launching a ‘self-sustaining’ fintech e-commerce marketplace, are among the activities planned by the International Finance Corporation (IFC), working alongside the Ukrainian Association of Fintech and Innovation Companies (UAFIC).

The IFC, part of the Washington DC-headquartered World Bank Group, announced that it has inked a partnership agreement with the UAFIC as they look to ‘leverage’ digital technology and fintech to promote financial inclusion in the eastern European country.

The partnership will tap into a wider theme of promoting legal and regulatory reform, including the rollout of open banking. Open banking involves the use of open application programming interfaces (APIs) to enable third-party developers – fintech companies – to build applications and services. It aims to increase competition and innovation within financial services.

The IFC-UAFIC collaboration is part of a four-year IFC ‘Financial Inclusion for Growth Project’ being implemented in co-operation with the Ministry of Finance, Ministry of Digital Transformation and National Bank of Ukraine that aims to use digital technology and innovative business models to help with financial inclusion. The project was announced in May 2020, with aims including the expansion of access to credit for SMEs.

‘Establishing framework’ for private sector

The IFC, which runs programmes to encourage the private sector in emerging markets worldwide, and three-year-old UAFIC plan to design and launch the financial literacy ‘toolkit’ by the end of this year.

IFC representatives will also help the association establish a ‘public-private dialogue’ to evaluate opportunities for the fintech online marketplace.

“The aim of our co-operation with the UAFIC is to establish a framework for the private sector to create a self-sustaining e-payment platform enabling fintechs, banks, SMEs and API developers to interact effectively while introducing different innovative financial services, such as product comparators, cashless payments and online credits,” IFC’s operations officer, Zarina Odinaeva, told Global Government Fintech.

Odinaeva added that the project will advise Ukraine’s government on establishing e-payment standards “that will allow better interaction between different e-payment systems to deliver more integrated customer-friendly services”.

The country’s parliament registered a draft law on payment services (‘Проект Закону про платіжні послуги’) in November 2020 to modernise payments regulation in the country, which has a population of more than 40 million.

2025 ambition

The ‘Strategy of Ukrainian Financial Sector Development Until 2025’ – compiled by various state institutions and regulators, and published almost 18 months ago (available as a 102-page EN-language document) – sets out a reform agenda and ambitions across tech-driven fields ranging from open banking to ‘RegTech’ (the application of technology to improve regulatory compliance).

Targets at a citizen level include increasing the number of adults with a bank account from 63 per cent (2019) to 80 per cent and increasing the proportion of cashless card transactions (as a share of all transactions) from just under 50 per cent to 65 per cent. The Covid-19 pandemic has accelerated a move away from cash across the globe.

In Ukraine – which has, as the World Bank notes, experienced acute political, security and economic challenges during the past seven years, including the outbreak of conflict in the eastern part of the country – the IFC also is working in partnership with the UK government’s Good Governance Fund and the Swiss State Secretariat for Economic Affairs (SECO).

The Good Governance Fund (GGF), a central plank of the UK’s government’s support to Ukraine, launched in 2015 to provide technical assistance and expertise in support of reforms in various eastern European countries.

Ukraine’s Ministry of Digital Transformation, which has been championing a ‘state in a smartphone’ initiative that aims to accelerate digitalisation, was set up in 2019.


Global Government Fintech’s news story (7 January 2021) on the government partnering the Stellar Development Foundation to assist with its digital money strategy and infrastructure: the Ministry of Digital Transformation signed a memorandum of understanding with the US-headquartered organisation to ‘develop virtual assets and to facilitate central bank digital currency (CBDC) infrastructure’