PERCULARITIES OF BANK LENDING UNDER CONDITIONS OF WAR

Abstract

The article summarizes the peculiarities of bank lending in Ukraine under conditions of large-scale military aggression by Russia. The urgency of the issue is determined by the fact that at the current level of financial system development, bank lending is characterized by financial inclusion and financial technologies. It is noted that, despite the war, bank lending in specific market segments has increased (mainly agricultural lending and the implementation of wartime credit support programs for enterprises). The main drivers for the corresponding growth are state-owned banks, while banks in foreign banking groups have actively reduced lending under war conditions. It is emphasized that the NBU’s anti-inflationary policy can lead to curbing the credit mechanism by indirectly stimulating the accumulation of liquidity in the form of certificates of deposit at high-interest rates. In order to ensure the functioning of the credit mechanism, the NBU has adopted some restrictions and requirements regarding lending under the war, which provided additional financial and operational credit opportunities for commercial banks. State credit programs allow both to minimize government costs subject to limited financial resources and to shift the analysis process from the borrower/investment project to commercial banks. Changes in the 5-7-9 credit program, concerning the expansion of lending purposes to minimize the consequences of the war for business, as well as to support the planting campaign, contributed to both economic growth and the growth of lending to the economy. Demand for investment loans, including preferential loans, fell to nearly zero during wartime. The peculiarities of the growth of crediting of agriculture in war conditions are separately determined. In order to ensure sowing in conditions of war, rising fuel prices, logistical export problems, package guarantee programs for loans to agricultural enterprises were implemented, obtaining preferential loans with deferred payment, assistance in attracting funds at minimum interest rates and guarantees from the EBRD and other organizations contributed to the growth of lending in the sector. The specifics of implementing the mortgage programs in 2022 are outlined.