In Ukraine, Whole Planet Foundation is helping local Credit Union Anisia to better serve very small rural enterprises with financing that adapts the successful group loan methodology used internationally, but rarely in Central and Eastern Europe. Anisia launched this new outreach strategy to Ukrainian entrepreneurs by partnering with an innovative new Ukrainian NGO called Key Initiative launched out of a realization that while Ukrainian Credit Unions are trusted local service providers, they aren’t reaching their potential to help very small enterprises grow in rural communities.
During a recent visit to Anisia and Key Initiative’s new group loan program in rural towns outside of Lviv, Ukraine it was obvious the impact these small, easily managed business loans were having on rural businesses. Natalya spent years after graduating from school looking for work without success and joined Anisia’s new business loan program, receiving about $828 to open a shop that has proven a stepping stone to building a reliable income on her own.
Natalya joined Anisia’s new program and used her microloan to open a small store.
Natalya meets with her loan group weekly and repays the capital in small, easy to afford installments. Other group members used similar financing to grow their home farms, start sewing businesses, expand a salon and trade in a variety of products from clothes to furniture.
In Ukraine, trust in the banking sector is particularly low after a recent history of collapsing banks that resulted in widespread loss of personal savings and left few options for small businesses to receive affordable financing to grow their operations. A Credit Union like Anisia, however, is a member-owned financial organization that is controlled by its members and offers savings and basic small loans to participating members as an alternative to commercial banks. Its membership structure lends a true spirit of self-reliance and community ownership that combats distrust in commercial finance companies and banks in volatile economies.
However, many Credit Unions do not provide the strong focus on innovative, accessible loans specifically for enterprise development that WPF seeks to support in poor communities. The technical assistance and support provided by Key Initiative to Anisia has helped bring this focus on microfinance for entrepreneurs to Anisia Credit Union that has otherwise served its members for almost 25 years offering savings accounts and personal loans.
Zoryana’s husband has long been a member of Anisia but it was only through a newly formed loan group that Zoryana applied for and received a first loan of $1,200 to support a range of rural business activities she runs from her own home farm.
Zoryana not only produces cheese and sour cream on her farm in Ukraine, but also invested her microloan capital into her rose garden (see photo at top of post).
Zoryana has scaled her production of dairy products like cheese and sour cream which increase the value of milk and she has also improved a rose nursery on her land and sells the flowers in nearby cities. She repaid her first loan and has since invested an additional loan of $1,500 from Anisia’s program into the business.
The partnership between Anisia and Key Ukraine has been a success so far and Key Initiative is now reaching out across the country to other Credit Unions interested in launching similar loan groups to help rural entrepreneurs like Natalya and Zoryana. WPF is proud to have Anisia as the Foundation’s first partner in Central and Eastern Europe and is now looking closer at other Credit Unions in the region supporting rural entrepreneurs.