Securitization could become one of the mechanisms for attracting private capital to finance businesses, housing, energy, infrastructure, and Ukraine\u2019s future reconstruction. Oleksii Semeniuk, Chairman of the NSSMC, writes about this in a column for Forbes Ukraine titled \u201cMaking Capital Work Twice: What the Newly Approved Securitization Law Changes.\u201d<\/p>\n
According to the latest estimates by the World Bank, the Government of Ukraine, the European Commission, and the United Nations, Ukraine\u2019s recovery and reconstruction needs over the next ten years amount to nearly USD 588 billion. The private sector could potentially provide about 40% of the necessary funding.<\/p>\n
That is precisely why one of Ukraine\u2019s key tasks is to create mechanisms that will allow private capital to be mobilized more effectively and channeled into the economy.<\/p>\n
One such mechanism is securitization.<\/p>\n
The logic behind this is that loans and other assets can be pooled together, and funds are raised from investors based on the cash flows generated by that pool. This allows financial institutions to free up resources for new lending.<\/p>\n
\u201cCapital that is already active in the economy helps attract further capital. This is one of the main advantages of securitization,\u201d<\/em> notes Oleksii Semeniuk.<\/p>\n