NBU signed two agreements with the International Finance Corporation.

The National Bank of Ukraine and the International Finance Corporation in Washington signed two new cooperation agreements.

According to the NBU, their aim is to expand small and medium-sized businesses' access to financing and support Ukraine's economic recovery amidst ongoing challenges caused by the Russian invasion.

The cooperation between the National Bank and IFC will occur in two areas: the development of digital financial services and the establishment of infrastructure for dealing with the resolution of distressed assets (ARC). Advisory support to the National Bank will be provided by the IFC in partnership with the State Secretariat for Economic Affairs of Switzerland (SECO), the Investment Climate Advisory Services Fund (FIAS), and the UK government.

"We are sincerely grateful for the strong technical and financial support provided by the World Bank Group and value our long-standing and successful cooperation. The assistance of the group's experts is always effective and professional, and together with them, the National Bank continues to implement ambitious reforms and programs in the widest directions. This includes the enhancement of the banking supervision and regulation system, the implementation of a war risk insurance system, which will significantly improve conditions for attracting investments into Ukraine, the development of instant payments, tokenization and oversight, green financing, and much more," commented NBU Chairman Andriy Pyshny.

Under the first contract, the National Bank and IFC agreed to work jointly on the further development of the digital financial services ecosystem in Ukraine, taking into account the experience of previous successful cooperation between the institutions. Key initiatives in this direction include stimulating innovation through open banking, increasing financial inclusion by promoting financial services through agency banking channels, encouraging businesses to implement innovative financial services using the NBU's regulatory platform ("sandbox"), and supporting the growth of cashless operations. These changes are expected to enhance competition in the banking sector, improve financial service offerings, facilitate the development of a cashless economy, and bring Ukraine's financial sector closer to European standards.

Under the second contract, the National Bank and IFC plan to address the issue of non-performing loans and create a legal framework in Ukraine for establishing companies for resolving distressed assets. Currently, there are no such companies in Ukraine's financial sector. They are expected to play a significant role in managing NPLs and attracting private investments. Effective NPL resolution via ARC can help reduce the overall number of NPLs, thereby strengthening the resilience of the banking sector. The partnership with ARC will help reduce risks for banks and other financial institutions so that they can continue to increase lending. The agreement provides for legislative reforms, training initiatives, seminars, and more. The partner in this agreement is the Investment Climate Advisory Services Fund (FIAS).