Bank lending to business entities: 2021–2024

Author:

ONISHCHENKO SerhiiORCID,DROZDOV EvgenyORCID

Abstract

The current situation in the country is characterized by a high degree of uncertainty, which prompts banks to invest resources not in the development of the real sector of the economy, but in risk-free and low-risk assets, which primarily include domestic government loan bonds (DGLB) and certificates of deposit (CD) of the NBU. This situation led to the fact that lending to corporate clients on market terms was not widely distributed and largely led to the implementation of the state credit program "5-7-9", according to which the state does not fulfill its obligations to banks in a timely manner to compensate the difference between market and preferential interest rates. The aim of the research is to develop a comprehensive app­roach to bank lending to business entities, which involves the implementation of radical measures to stimulate it on a market basis in a harmonious combination with state support. А set of methods of scientific knowledge were used: comparison, analysis and synthesis, grouping, abstraction, observation, etc. Ukrainian banks are currently weakly motivated or unable to provide business lending on a market basis. This is due to the presence of the state credit program "5-7-9", which provides a number of preferences to its participants. An inhibiting factor in the development of market lending to enterprises is also the attractiveness for banks of risk-free investments in DGLB and CD NBU, for which interest rates are higher than for loans granted to corporate clients. In addition, the latter generate a high level of risks for banks during the war. A set of measures aimed at the deve­lopment of business lending on a market basis is proposed, which include: the use of risk diversi­fication tools by providing guarantees from the state and international financial orga­ni­zations, in particular the EBRD, the EIB; the imple­mentation of military risk insurance, as well as the transformation of the state credit program according to the outlined directions

Publisher

State University of Trade and Economics

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