Financial Sector Transformation Activity Final Report

The activity was implemented by DAI Global, LLC, under contract with the United States Agency for International Development (USAID). The program focused on six key components: legal and regulatory reform, public confidence, consumer protection, capital and commodity markets, access to finance, and digital finance. The activity faced significant challenges due to Ukraine's non-permissive environment, characterized by ongoing conflict with Russia, endemic corruption, and slow economic growth. Despite these challenges, the activity made significant progress in promoting financial sector reform. Key achievements include the development of a new financial reporting system, the establishment of a deposit guarantee fund, and the implementation of anti-money laundering and combating the financing of terrorism regulations. The activity also made significant progress in promoting public confidence in the financial sector. This included the development of a public awareness campaign, the establishment of a consumer protection agency, and the implementation of a system of electronic payments. Additionally, the activity supported the development of digital finance, including the establishment of a fintech market and the implementation of electronic invoicing and small and medium enterprise access to finance. The activity's quantitative highlights include a 27% increase in foreign currency deposits, a 15% increase in credit to the private sector, and a 10% increase in the European Business Association's investment attractiveness index. The activity also made significant progress in promoting gender and inclusive development, with a focus on increasing access to finance for women and small and medium enterprises. The activity's success was due in part to the strong partnership and collaboration with the Government of Ukraine and other financial sector counterparts. The activity also received significant support from USAID staff and the USAID/Ukraine Mission's senior leadership and staff. The activity's achievements and results are a testament to the importance of promoting financial sector reform in Ukraine and the need for continued support and cooperation between the government, civil society, and the private sector. The activity's lessons learned and recommendations include the need for continued support for financial sector reform, the importance of promoting public confidence and consumer protection, and the need for increased access to finance for women and small and medium enterprises. The activity's achievements and results also highlight the importance of promoting digital finance and the need for continued cooperation between the government, civil society, and the private sector to promote financial sector reform in Ukraine. The activity's implementation was influenced by several key contextual events, including continued Russian aggression in the separatist Donbas region, two presidential administrations, entanglement in US politics, continuous oligarchic attacks on Ukraine's anti-corruption institutions, and slow economic growth. The activity's success was also influenced by the COVID-19 pandemic, which had a significant impact on the economy and the financial sector. Overall, the Financial Sector Transformation Activity in Ukraine made significant progress in promoting financial sector reform and promoting public confidence in the financial sector. The activity's achievements and results highlight the importance of promoting financial sector reform in Ukraine and the need for continued support and cooperation between the government, civil society, and the private sector.