FINANCIAL INCLUSION IN THE CONTEXT OF UKRAINE’S ECONOMIC RECOVERY

Abstract

The article provides a detailed analysis of approaches to determining the impact of financial inclusion on a country’s financial and economic system. It emphasizes that financial inclusion involves not only the accessibility of financial services but also the creation of an institutional environment to engage all population segments and businesses to use various financial services. These aims to stimulate the country’s economic recovery and mitigate the crises caused by military actions. The data presented in the article highlight the significant potential for expanding financial inclusion in Ukraine. However, the current level of financial inclusion is considerably lower than that in OECD countries according to numerous parameters. The primary barriers to enhancing financial inclusion are divided into institutional and non- institutional ones. Institutional barriers are associated with the system of formal and informal norms, rules, and institutions that ensure interaction with the country’s institutional system regarding the formation, allocation, and use of financial resources. These include market, regulatory, infrastructural, and technological constraints. Non-institutional barriers are informal and associated with entrenched traditions, customs, norms of financial behavior, and  characteristics of economic mentality that hinder access to financial services. To overcome these barriers, the article proposes: developing new and improving existing financial products, enhancing the legal framework of the financial services market, advancing digital technologies and fintech, increasing the level of financial literacy. Finally, these measures will contribute to increasing income and assets, optimizing expenses, improving resource allocation, expanding investment opportunities and savings, boosting demand for financial services, fostering human capital development, creating new jobs, raising the living standards, and enhancing the resilience of Ukraine’s financial system.