PROSPECTS FOR THE DEVELOPMENT OF A SYSTEM FOR ENSURING THE SECURITY OF LENDING TO ENTERPRISES BY BANKING INSTITUTIONS IN THE CONTEXT OF EUROPEAN INTEGRATION

Abstract

Lending to enterprises constitutes a critical element of the financial system of any country, as it provides businesses with the necessary financial resources to develop production capacities, implement investment projects, and introduce innovations. In the context of Ukraine’s European integration, the importance of ensuring the security of credit operations has significantly increased due to heightened competition in the financial market and stricter requirements for transparency and efficiency in the use of credit resources. Maintaining stability and security in enterprise lending has become particularly relevant amid macroeconomic instability, driven by global crises and internal economic factors, including ongoing military operations in Ukraine. Based on data from the State Statistics Service of Ukraine and the National Bank of Ukraine, an analysis was conducted on the ratio of bank loans to gross domestic product (GDP) over the period 2022–2024. In 2022, Ukraine’s nominal GDP amounted to UAH 5,191,028 million, with total client loans of UAH 1,036,213 million, including UAH 801,413 million provided to business entities. The ratio of client loans to GDP reached 20%, while loans to business entities accounted for 15.4%, representing 75.5% of the total loan portfolio. In 2023, despite the increase in nominal GDP to UAH 6,537,825 million, lending to enterprises slightly decreased to UAH 783,690 million, reducing the loan-to-GDP ratio to 12%, though the share of business loans in the total portfolio remained stable at 76.4%, reflecting the sustained priority of financing business entities under heightened risk conditions. By 2024, enterprise lending increased to UAH 850,581 million with GDP at UAH 7,658,659 million, corresponding to a ratio of 11.1%, and the share of loans to enterprises was 74.7%, indicating a gradual recovery of lending activities supported by improvements in the macroeconomic environment and the adaptation of banking procedures to modern credit security requirements in the context of European integration. Analysis of these ratios demonstrates the necessity of a comprehensive approach to credit risk management, improvement of mechanisms for assessing enterprise creditworthiness, and expansion of state-backed credit support instruments. Promising directions include the implementation of modern digital technologies for monitoring credit operations, increasing transparency in the use of credit funds, and applying state loan guarantee programs for small and medium-sized enterprises. Additionally, the concentration of corporate lending in a few major banks highlights the need for enhanced risk management practices, particularly for large corporate borrowers, and the adoption of measures to strengthen lending security. Key challenges include high credit risk and loan defaults, insufficient transparency in fund utilization, limited state guarantees, inadequate adaptation of banking procedures to European standards, the impact of macroeconomic and military risks, and the concentration of financial resources among large banks. Addressing these challenges requires digitalization of banking processes, integration of EU risk management standards, development of state guarantees, and implementation of risk mitigation mechanisms. Overall, a systematic and integrated approach to enhancing the security of enterprise lending will contribute to financial stability, increase investment attractiveness, and support business development in the post-crisis and post-war recovery period.