Expert opinion

Andriy Dubas, President of the Association of Ukrainian Banks, discussed the pressing issue of military personnel's access to consumer loans on Espreso TV. Despite legislative guarantees, banks are forced to restrict such loans due to the lack of a compensation mechanism on the part of the state.

According to a law passed in 2014, banks are prohibited from charging interest and penalties on loans issued to military personnel. At that time, the number of such borrowers was limited, and enforcement of the law did not pose any systemic challenges. However, after the start of the full-scale invasion in 2022, the situation changed dramatically.

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"We are dealing with a large number of military personnel who are eligible for preferential loans, but banks do not have the resources to cover these loans at their own expense," - explained Andriy Dubas.

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Banks attract funds from depositors and businesses, on which they charge interest. Issuing interest-free loans without any compensation means operating at a loss.

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"Banks do not have free resources. If the state obliges them to issue preferential loans, there must be a compensation mechanism — as in the “5–7–9” program or preferential mortgages." — emphasized the President of the AUB.

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According to Andriy Dubas, there are two realistic options:

• or the state allocates funds in the budget to compensate for such loans,
• or the legislation is revised, and military personnel can take out loans on general terms, agreeing to pay interest.
  At the same time, he stressed that this issue should not be postponed, especially given the domestic and family needs of defenders, who often apply for small loans.