Financial Inclusion in Ukraine’s Territorial Communities under Wartime Conditions

Abstract

Under conditions of martial law in Ukraine, financial inclusion has become a critical factor for sustaining the socio-economic resilience of territorial communities. However, the combined effects of wartime shocks, accelerated digitalization, and spatial disparities on access to and use of financial services remain insufficiently explored at the local level. This study aims to assess the level of financial inclusion among Ukraine’s territorial communities during martial law and to identify the key territorial and digital factors shaping access to financial services and trust in financial institutions. The study is based on original survey data collected from the population of territorial communities (n = 157). The empirical analysis employs descriptive statistics and frequency analysis, Pearson’s chi-square test, one-way analysis of variance, the construction of a composite financial inclusion index, and binary logistic regression to examine the determinants of trust in financial institutions. The results reveal pronounced territorial inequality in access to financial infrastructure: residents of rural and part of settlement-type communities are significantly more likely to face the absence of financial institutions than urban residents. The composite index indicates a moderate average level of financial inclusion accompanied by substantial internal differentiation, with the lowest index values observed in rural communities. Despite limited physical access to financial infrastructure, most respondents demonstrate high digital payment skills and actively use remote banking services. Regression results show that more intensive use of mobile banking applications is statistically associated with a higher probability of trust in financial institutions, even after controlling for socio-demographic and territorial characteristics. At the same time, behavioral constraints persist, particularly low levels of systematic expenditure planning and expense tracking, which reduce the capacity of financial services to support long-term household resilience. The findings provide an empirical basis for the development of differentiated financial inclusion policies tailored to the specific characteristics of territorial communities, as well as for improving digital financial services and financial education programs in the context of wartime challenges and post-war recovery.