THE ROLE OF LENDING OF ENTERPRISES BY COMMERCIAL BANKS

Abstract

Bank lending is a crucial mechanism for financing the activities of enterprises, enabling them to secure working capital, invest in production expansion, implement new technologies, and foster innovation. In a volatile economic environment, lending becomes a key instrument for supporting entrepreneurial activity. The issue of access to credit resources and their effective utilization is relevant for both academic research and the practical activities of enterprises. During wartime, the problem of enterprise lending becomes particularly acute. Military actions significantly impact the country's economic situation, creating additional challenges for entrepreneurial activities. Enterprises face infrastructure destruction, loss of production capacities, decreased solvent demand, and the need to restructure supply chains. In such conditions, access to credit resources is critically important for business survival and recovery. Recent research on bank lending focuses on analyzing the conditions and factors affecting the availability of credit resources for enterprises. Scholars investigate credit risk management mechanisms, optimization of bank credit portfolios, and the impact of macroeconomic factors on the credit market. However, there is insufficient research on the interaction between banks and enterprises during crises and financial market instability. In the context of martial law, studies on the impact of military actions on the economy and the financial system become relevant. The article aims to analyze the role of bank lending in enterprise activities during martial law, identify the main problems and barriers to obtaining loans, and develop recommendations for improving access to credit resources for enterprises. The research highlights that bank lending plays a vital role in ensuring liquidity, investing in production development, and innovation. Yet, several problems complicate access to credit resources, such as high credit costs, stringent collateral conditions, and limited opportunities for small and medium-sized enterprises (SMEs) to obtain loans. Analyzing statistical data, it is evident that non-financial corporations hold the largest share of account balances among all sectors, indicating their significant role in economic lending. The study finds a weak to moderate negative correlation between loan account balances and retail trade volumes during the analyzed period, suggesting that increased loan balances do not strongly correspond to higher retail trade volumes. The article underscores the importance of bank lending for business adaptation and resilience in crisis conditions and suggests that improving credit policies, reducing interest rates, and simplifying collateral requirements could enhance access to credit resources. Additionally, fostering collaboration between banks and enterprises, and providing state and international financial support, could further aid in mitigating the barriers to effective enterprise lending during economic instability.