From Crisis to Resilience: The Impact of War on the Formalization and Sustainability of Remittance Channels in Ukraine

Cristina Prochazkova Ilinitchi
University of Economics and Business from Prague

Abstract

The paper examines how war and economic crises influence the formalization of remittance channels among Ukrainian remitters, with a specific focus on the implications for sustainable financial systems. Remittances play a vital role in supporting households and economies during periods of instability, but informal channels, often preferred for their flexibility, lack regulatory oversight, potentially posing risks to both senders and recipients. Through ten in-depth interviews with Ukrainian remitters, the paper explores shifts from informal to formal channels in response to challenges posed by the ongoing conflict and economic pressures. The study considers how crises affect remittance behavior, especially the level of formality of remittance channels. Additionally, the paper addresses the role of sustainable financial practices in enhancing the resilience of remittance systems, as well as how regulatory bodies might adopt policies to ensure secure and accessible remittance services during crises. The findings will contribute to understanding the broader implications of formalizing remittance channels, with a view to advancing both the security and sustainability of financial systems that support migrant communities during turbulent times.

Presentation