Andriy Dubas, President of the Association of Ukrainian Banks, appeared as a guest on the special program “See You Tomorrow,” produced by Hromadske Radio and the Association of Ukrainian Banks. During the conversation, they discussed the development of the consumer lending market, the transformation of the microfinance sector, the National Bank’s role in protecting consumer rights, and the principles of responsible lending.
According to Andriy Dubas, today microcredit organizations and banks perform different functions in the financial market, and the choice between them depends on the client’s needs.
“Banks offer both short-term and long-term financing, but at slightly lower interest rates. Meanwhile, microcredit organizations typically charge higher interest rates but provide easier access to such loans. If the risks for a financial institution are higher, then the cost of the loan will also be higher,” noted the AUB president.
At the same time, he emphasized that microloans should be viewed as a tool for addressing short-term financial needs, rather than for long-term purchases.
“If you need a small amount of money right away, this can be a useful tool. But for longer-term goals—such as a mortgage, a car, or a major purchase—it’s more advantageous to turn to a banking institution,” explained Andriy Dubas.
Special attention was paid during the conversation to the changes that have taken place in the microcredit market over the past decade. According to the AUB president, the market now operates under much stricter rules, and the rights of financial services consumers are much better protected than before.
“Since the National Bank became the regulator of financial companies, I would say that order has been fully restored. There is now a registry of collection agencies, clear rules for interacting with clients, and the protection of financial services consumers’ rights has improved by several orders of magnitude,” he emphasized.
Andriy Dubas also noted the role of market self-regulation and the Memorandum on Responsible Lending, which brought together leading sector participants.
“We see that a mature market can not only meet regulatory requirements but also independently agree on additional standards of responsible conduct. That is why companies that value their reputation are willing to take on additional obligations,” noted the AUB president.
According to market research cited by the AUB president, most customers use microloans to cover their current financial needs, rather than for entertainment or gambling expenses.
“About 70–75% of customers use these funds for current needs or so-called ‘bridge loans’ until payday. At the same time, spending on entertainment or gambling accounts for the smallest share of reasons for taking out loans,” said Andriy Dubas.
Summing up the conversation, the AUB president emphasized the need to approach any credit obligations responsibly and carefully assess one’s own financial capabilities.
“If a loan allows you to continue your economic activity, it is a good loan. The most important thing is to understand where these funds will come from to repay the loan, to read the terms and conditions carefully, and to realistically assess your capabilities,” concluded Andriy Dubas.
The full episode of the podcast is available on the websites of Hromadske Radio and the Association of Ukrainian Banks: https://www.youtube.com/watch?v=rd5l59xP8eQ&t=23s
