ADAPTATION OF BANKING MODELS OF SME LENDING TO THE CONDITIONS OF THE POST-WAR ECONOMY: FROM STANDARD CREDIT TO EMBEDDED LENDING

Abstract

The purpose of the article is to substantiate the feasibility of adapting banking models of lending to small and medium-sized businesses to the conditions of the post-war economy of Ukraine by transitioning from standard credit to embedded lending models. The study used methods of structural-logical analysis, comparative analysis, institutional approach, systematization of scientific sources, as well as analytical generalization of international and national practices in the field of fintech and bank lending to SMEs. It was established that traditional banking models of lending to SMEs, focused on a separate credit product, formalized scoring and strict requirements for financial reporting and collateral, lose their effectiveness in the conditions of the post-war economy. It is substantiated that embedded lending is an evolutionary form of transformation of bank credit, and not its alternative, since it allows integrating financing directly into the operational activities of SMEs. Key limitations of the implementation of embedded lending in the banking system of Ukraine, which are of a systemic nature, are identified. These include: regulatory uncertainty regarding the role of non-financial platforms in the lending process; change in the structure of credit risk associated with the use of transactional and behavioral data instead of classic financial history; operational and cyber dependence of banks on digital platforms, which increases the risks of business process interruption; limited organizational readiness of banks to transition from product to platform lending logic. Systemic directions for adapting banking models for SME lending are proposed, which include: institutional integration of banks with digital platforms with a clear division of functions and responsibilities; transformation of scoring models by combining financial, transactional and behavioral data with mandatory internal validation of models; transition to contextual financing of specific business operations, which reduces target and credit risk; strengthening requirements for operational and cyber resilience of partner platforms; phased scaling of embedded lending through pilot projects in the SME segment. The results of the study may be useful for banking institutions, financial regulatory authorities, fintech companies, as well as small and medium-sized businesses in developing and implementing modern lending models in the context of post-war economic recovery.