Uman NUH | today: 09/05/2019

Reality and prospects of bank lending

Author(s) Nepochatenko Olena O., Doctor of Economics, Professor, Rector of Uman National University of Horticulture, Head of Department, Uman National University of Horticulture
Vlasyuk S.A., , , Uman National University of Horticulture
Bondarenko N.V., , , Uman National University of Horticulture
Category Economics
year 2017 issue Випуск №91. Частина 2
pages 6-14 index UDK 336.71
DOI
Abstract Among all financial institutions a significant proportion of free resources continues to be owned by the banking segment. The discrepancy between supply and demand in the market of financial services has led to imbalance in the economic sector and a slowdown of its reproduction and development. Banks are an integral part of the modern financial and economic sector of Ukraine. Being in the centre of the country’s economic life and providing services to producers, banks are the main link between a producer and a consumer. It is found that the financial and economic crisis, devaluation of the national currency, systemic banking crisis, taking place in the economy of Ukraine, led to further instability and slowing the development of the financial sector, growing unemployment, deepening poverty and worsening social and political risks. In the present circumstances banks are the main and key element of the economic regulator. In this aspect, loans perform the characterological function, transforming into the main source of additional funds for the national economy. It is analyzed that the National Bank of Ukraine began to raise the interest rate rapidly. So, the rate of 9.5% as of 15.04.2014 has reached a maximum level of 30% since 04.03.2015 to 27.08.2015. This caused a rise in loan resources to commercial banks which respectively increased interest rates on loans granted to the population and economic entities. Increasing the NBU discount rate caused identical adverse economic conditions for the activities financial and credit bodies and for individuals and legal entities. High interest rates on credit transactions are caused by the high cost of attracted funds on deposit accounts, significant inflation and led to uncertainty in the financial market. It is found that in recent years the NBU discount rate is constantly decreasing, tends to a decrease and the cost of credit. However, it remains at a high level which is not attractive for economic entities and the population. It i8s determined that currently there is a positive trend that is an increase in deposits, additional capitalization of banks and balanced credit policy. Output of the national economy of Ukraine from the crisis, resumption of lending and effective risk management can give impetus to exit the banking sector out of the stagnation.
Key words bank lending, financial resources, national economy, interest rate, credit, discount rate.
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