FINREP II Annual Report FY13

The program supports two key USAID results: IR 2.1 Increased investment availability to the emerging middle class and IR 2.2 Strengthened private sector advocacy and support institutions. During its first year, FY13, FINREP-II met all major Performance Monitoring Plan (PMP) and Work Plan benchmarks. The program has continued USAID's legacy of being a key contributor to Ukraine's establishment of a more effective financial sector. FINREP-II's performance level of PMP targets was 100% or higher in several areas, including the number of material improvements in the derivatives and commodity exchange legislation framework, the number of material improvements in the Deposit Guarantee Fund, and the proportion of students who demonstrated improvement in knowledge and skills after the financial literacy course. Objective 1: Strengthen Supervision and Regulation of the Financial Industry is a key component of the FINREP-II program. Activities under this objective aim to increase confidence in the financial sector, promote transparency, and make the financial sector stronger and less vulnerable to crises. FINREP-II contributed to the strengthening of the financial sector by working with Ukrainian reformers in reviewing over 30 draft laws and regulations, providing timely inputs on how they could be best aligned with international standards and norms. FINREP-II worked closely with the World Bank in key areas such as consumer protection, corporate governance, and promoting international standards in financial reporting. These are areas where transparency is particularly important to enhance investor confidence. The program also assisted the Deposit Guarantee Fund in strengthening its new bank resolution role and in communicating to Ukrainians that their bank deposits are safe. FINREP-II invested considerable effort in supporting Ukrainian reformers in addressing continued pension reform, providing analytical assistance to help them strengthen the case for holding the line on reforms implemented during the last two years. Objective 2: Develop Financial and Derivatives Markets is another key component of the FINREP-II program. Activities under this objective aim to develop financial and derivatives markets, increase access to financial services, and promote financial inclusion. FINREP-II contributed to the development of financial and derivatives markets by working with Ukrainian reformers in reviewing over 30 draft laws and regulations, providing timely inputs on how they could be best aligned with international standards and norms. Objective 3: Increase Financial Literacy of the General Population is a key component of the FINREP-II program. Activities under this objective aim to increase financial literacy among the general population, promote financial inclusion, and reduce financial vulnerability. FINREP-II contributed to the increase in financial literacy by implementing regional financial literacy pilot courses for public schools, training financial sector supervisors in international standards, and promoting transparency in financial reporting. The program reached 526% performance for the number of schools implementing regional financial literacy pilot courses, 560% performance for the number of students enrolled in financial literacy programs, and 582% performance for the number of female students enrolled in financial literacy programs. The proportion of students who demonstrated improvement in knowledge and skills after the financial literacy course increased by 285%.