Hope in Ukraine: A Faith-based Microfinance Institution on the Frontlines of War
It is hard enough to watch the horrors of war unfolding in a country that you have visited. It is even harder knowing that people you know are still there, dealing with the disruption and chaos of war. It had been more than 8 years since I was last in contact with Andre Barkov, Managing Director of Nadiya, a small microfinance institution in Ukraine whose name means “Hope.” I met him during my first and only trip to Ukraine back in 2008. I was there to conduct due diligence for a potential loan from Triple Jump, the company I worked for at the time.
When war broke out in Ukraine, I reached out to Andre via social media to see if he was okay. I was relieved when he messaged me back from Lviv, in Western Ukraine. I was glad he and his family were safe, but was trying to imagine how incredibly stressful his life must have become. I wanted to know how he was coping, so we organized a call a few days later.
As managing director of a microfinance institution with 13 branches across Ukraine, he is responsible for the safety and wellbeing of his 48 staff. He sounded remarkably calm on the call, and even managed to maintain a sense of humor. He considers himself lucky compared to compatriots in other parts of the country as there is still abundant food, fuel and other basic necessities in Lviv. “And there are no missiles flying over my head,” he adds.
Most of Nadiya’s staff has relocated to Western Ukraine and neighboring countries, but seven staff members decided to remain in Eastern Ukraine and Russian occupied areas. The company is paying full salaries to staff and is assisting them with food, medication, transportation and shelter. Nadiya is also monitoring the situation of its 600 borrowers, trying to help the most vulnerable with cash grants. Three of its branches are currently in Russian occupied territory and it is nearly impossible to move money into these areas as the banking system there has all but collapsed. In some cases Nadiya has been able to transfer money on to the credit cards of some clients to enable them to buy food in the few stores that still accept card payments.
The Central Bank of Ukraine has also prohibited all lending, so Nadiya has granted all its borrowers a three-month moratorium on principal and interest. Remarkably, despite this concession, some clients continue to repay their loans. But the biggest problem they face is that 80% of their clients work in primary agriculture and about 70% of these clients live in areas now under Russian control. These clients are faced with a huge dilemma: whether or not to plant crops this season. “Workwise we are in trouble,” Andre tells me. This is normally a busy lending period for Nadiya as it coincides with the planting season. “Currently everything looks really sad,” he says. “Input prices have gotten very expensive, and even if farmers plant crops, there are no guarantees they will be able to sell what they produce. Because infrastructure and logistical networks have been destroyed, they cannot sell to wholesalers or local chains. I just can’t imagine them being successful this year,” he admits.
I asked if any of their borrowers have left the country. “None of them have left. Can you imagine?” he asks. “Even some of our loan officers have stayed despite the imminent danger of living in Russian controlled territory,” he tells me. This tenacity in the face of danger applies to his own family situation as well. Despite having U.S. green cards, they have decided to stay, for now, with Andre in Lviv. “My wife, she is tough and stubborn,” he tells me, “and she wants to be here with me.”
Despite the danger and uncertainty, Andre is hopeful the war will be over soon. Once the fighting ends, he says Nadiya will resume lending and they will look at every client through the lens of understanding their specific difficulties. They will talk to each one individually to see how they can help. Fortunately, Nadiya is part of the Hope International faith-based global network of microfinance institutions, which can mobilize grant support to its affiliates.
In the meantime, I asked how his kids (aged 9 and 13) are dealing with the situation. He tells me they seem to have found their daily rhythm, which helps maintain a sense of normalcy. They attend private school on-line, which they got used to during the pandemic. While they grumble about the slow speed of the internet, which prevents them from playing their favorite videogames, he says they do not really care that much. They play with other kids in the building and are just trying to enjoy life as best as they can.
I asked him about potential military service. He said there is a chance he could be called up, but believes the probability is low. “I am a 52-year-old man,” he says jokingly, “and not exactly a big military expert. They might draft me, but it will be to mop the floors somewhere or wash the dishes.”
At the end of our conversation, he reminds me that Ukraine is a beautiful country, and he strongly believes that once the war is over, they will be able to rebuild everything and prosper. He adds God is with them, and once the war ends, he believes the Western world will be too. “As soon as the Russians are out,” he says, “there will be a lot of work to do, to rebuild, restore and reconstruct everything.”
For the people of Ukraine, that day cannot come soon enough.