Ukrainian consumers are driving growth in the domestic credit market, outpacing businesses in their demand for loans, according to data compiled by Opendatabot, reported Ukraine Business News.

As of early August, financial institutions had issued a total of UAH1.23 trillion ($31bn) in loans to businesses and households, up 15% from a year earlier and 26% higher than in 2021. Companies still accounted for the bulk of borrowing, with UAH909.3bn, or 74% of the total. However, household loans rose faster, climbing 22% year-on-year to UAH316.1bn, compared with a 13% increase for businesses.

The shift marks a recovery from the sharp contraction in lending after the war began in 2022, when banks tightened credit and non-performing loans surged. By April 2023, the consumer loan portfolio had shrunk to UAH205.4bn. Since then, the market has stabilised, with lending to households rising 50% over the past two years, compared with a 25% increase in business loans.

Most borrowing remains denominated in the local currency. Ninety-seven percent of household loans and 72% of business loans are in hryvnia. Foreign currency lending to households is negligible at just 3% of the total – around UAH10bn ($239mn) – and more than 90% of those loans are non-performing.