Business

Ukrainians borrowed record $1.8 billion in microloans in 2021

1 min read
Ukrainians borrowed record $1.8 billion in microloans in 2021
Microloans may be fast and easy to get but their interest rates are high and add up quickly. (Pixabay)

Ukrainian households borrowed roughly $1.8 billion (Hr 49 billion) in microloans between January and October 2021, according to Opendatabot. That’s $10 million more than in all of 2020.

The average loan amounted to $165 (Hr 4,500). These kinds of small loans are heavily advertised on Ukrainian TV channels, promising easy money for borrowers to make ends meet or buy expensive gadgets.

About 85% of these kinds of loan agreements are reached online. The market is exploding: in 2021, about 1.2 million loans were issued per month, compared to 983,000 in 2019.

However, despite their convenience, interest rates on microloans can add up to a staggering 510% per year on average, according to a study by the United States Agency for International Development. Borrowers often overlook this fact, thinking they can pay the money back quickly.

As a result, the total debt for overdue microloans has increased by 5% to $570 million in the first nine months of 2021.

Avatar
Alexander Query

Reporter

Alexander Query is a reporter at the Kyiv Independent. He is the former business editor at the Kyiv Post. He worked as a TV correspondent and an anchorman at UATV in Ukraine, and received a BA in modern literature from La Sorbonne, in Paris.

Read more
News Feed

While Ukraine also lacks Western-supplied weapons, soldiers and commanders say shortages of basics — cars, drones and people — make holding back Russia extremely difficult. Even as Kyiv seeks U.S. approval for Tomahawks, they say critical, rudimentary gear is the more pressing need.

Russia faces an increase in the arson and “spontaneous combustion” of electrical panels, railway relay cabinets, and other infrastructure helping Moscow wage its war against Ukraine over the past week, a source at Ukraine’s military intelligence told the Kyiv Independent.

Video

The episode covers Russian war crimes in Pokrovsk and continued attacks on Ukrainian cities, including missile strikes on Kyiv and Kharkiv. While Moscow continues to reject a ceasefire with Ukraine, has President Trump finally shifted his approach to Russia?

Show More