Why credit demand is growing in Ukraine: real factors, trends, and what to expect in 2025
In the second quarter of 2025, for the first time in several years, Ukrainian banks noticed that both individuals and businesses started borrowing more actively. At the same time, banks no longer fear that these loans will turn bad. This is confirmed by the latest results of the National Bank of Ukraine’s (NBU) credit survey. Why is this important, what is driving these changes, and what could happen next? Let’s break it down in detail, using clear language and real examples.
What exactly happened?
According to the NBU, demand for loans from businesses and households increased in the second quarter of 2025. For the first time since early 2024, banks expect the quality of issued loans to improve that is, they expect more loans to be repaid on time, and the share of overdue loans to decrease.
Quote from the NBU survey:
“Banks remain optimistic regarding the growth of business and household loan portfolios. For the first time since the first quarter of 2024, respondents expect improvement in the quality of both corporate and household loans.”
In simple terms:
Banks are not just ready to lend more they also expect to get their money back, with interest, and on time.
Why are businesses and Ukrainians borrowing more actively?
In 2025, for the first time since the start of the full-scale war, there has been an increase in demand for long-term loans, especially among large enterprises. Businesses need money to develop: to buy new equipment, launch new projects, modernize production, or replenish working capital.
Explanation from banks:
“The increase in loan demand is linked to companies’ needs for capital investment and working capital replenishment.”
For households, there has been greater interest in mortgages (housing loans) and consumer loans. The explanation is straightforward:
- Improved consumer confidence (people are more optimistic about the future).
- Expectations that housing prices will rise, prompting people to buy sooner.
- Some banks offer more attractive terms for certain categories of borrowers.
What factors are holding back this demand?
The main obstacle is interest rates. The average lending rate remains quite high, especially for small businesses.
Quote from the NBU survey:
“For the second quarter in a row, banks note that interest rates are a factor restraining demand.”
Other factors:
- The ability to get a loan from another bank (competition).
- The availability of companies’ and households’ own savings.
What is the situation with loan quality?
Banks expect that the quality of loan portfoliosboth in the corporate sector and among individuals will improve. That is, fewer loans will become problematic, and more will be repaid on time.
NBU data:
“In the second quarter, business debt burden remained moderate. The share of banks that considered household indebtedness to be low somewhat decreased.”
Explanation:
Most borrowers proved to be responsible, and over the past year, banks have become even more selective in deciding whom to lend to.
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Why is this happening now?
- Deferred demand: for two years, people and companies put major purchases and investments on hold because of the war. Now, some have realized that growth is necessary to survive, and have started borrowing for real development.
- Macroeconomic stability: inflation has slowed, the hryvnia exchange rate is relatively stable, and the NBU is gradually lowering its key policy rate. This builds trust in the economy.
- State support programs: there are government programs supporting mortgages and businesses, making it easier to access loans.
What could this lead to? A financial analyst’s view
Positive outcomes:
- The economy gets a “lifeline”: loans allow businesses to update their equipment, launch new production lines, and create jobs.
- More investment means more taxes and higher salaries: when businesses invest, the government receives more revenue, and employees get more stable incomes.
- Growth in mortgages stimulates construction: this triggers a chain reactionfrom construction jobs to increased demand for furniture and appliances.
Potential risks:
- High rates could “cool off” growth: if interest rates remain high, it will be unprofitable for many to take out loans, especially large ones.
- External threats: the war is not over, so economic stability still depends on the external situation.
What’s next?
Banks forecast: in the third quarter of 2025, demand for business loans, mortgages, and consumer loans will continue to grow. If this trend continues, lending will truly become an engine of economic growth, and the banking sector will regain confidence that money is circulating and being repaid in Ukraine.
The Ukrainian economy is gradually shifting from “survival mode” to development. Loans are not just borrowed moneycthey are a tool for growth and confidence. Banks believe that both businesses and individuals are ready to move forward and take on new obligations. The main task now is to maintain this trust, avoid past mistakes, and ensure fair competition in the market.
In simple terms: when people and companies borrow not out of fear, but with faith in the future, the country has a real chance for growth. And this is exactly what we are beginning to see in Ukraine’s financial system in the summer of 2025.
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