Uman NUH | today: 01/18/2023

Special features of financial and lending provision for agrarian manufacturers in Ukraine

Author(s) Nepochatenko Olena O., Doctor of Economics, Professor, Rector of Uman National University of Horticulture, Head of Department, Uman National University of Horticulture
Malyovanyi M., Doctor of Ekonomikal Sciences, ,
Vlasyuk S.A., , , Uman National University of Horticulture
Kolotukha S.M., Candidate of Economics, , Uman National University of Horticulture, Ukraine
Bondarenko N.V., , , Uman National University of Horticulture
Category Economics
year 2022 issue Issue number 100. Part 2
pages 197-208 index UDK 338.434:334.72
DOI 10.31395/2415-8240-2022-100-2-197-208 (Link)
Abstract The article deals with the issue of some special features of financial and credit provision for agrarian manufacturers in Ukraine. It was found that majority of private resources are traditionally funded by local commercial banks, foreign branches, banks and insurance companies, and it has been identified that these institutions directly finance small farmers and entrepreneurs and promote microfinance schemes to fund large rural infrastructure projects. Efficiency indicators of lending to the native agrarian sector are reviewed and it is determined that they are at a significantly lower level compared to similar US indicators. It has been identified that over the past five years, the agricultural sector of Ukraine has demonstrated a growing trend and is currently the main source of foreign currency inflow into the country and a key driver in supporting the trade balance. It was found that Ukraine has a huge natural resource stocks for the development of agrarian business and suitable climate conditions that create opportunities for high-quality agricultural production, ranking the country in the global food market by ensuring food security. The study of current trends in the agricultural sector shows that Ukrainian agribusiness (except for large agricultural producers) operates in conditions of constant and severe shortage of funds. The level capital investments in the agrarian sector are analyzed and the main obstacles for investing in the agricultural sector are identified. It was determined that last year the investment ratios in Ukrainian economy were 2–2.5 times lower than the regulatory needs. It was studied the investment ratios in the agrarian sector funded by the State and identified areas of State support provided to agricultural businesses in current reality of Russian military aggression. Significant factors of insufficient lending are revealed, in particular the loan procedures, high interest rates and low creditworthiness of agricultural manufacturers. It should be emphasized that the agrarian sector of Ukraine requires the immediate creation of a specialized cooperative system of agricultural lending and a nationwide network of financial institutions. Effective response has been proposed to stop the decline in investment and create an attractive climate for investment in the industry, as well as to improve the conditions for funding and lending to small and medium-sized businesses.
Key words agrarian sphere, credit, crediting of agrarian business, financial and credit providing, microfinance, state support, insurance of agrarian business
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