Development of alternative forms and types of agricultural lending in Ukraine

Abstract

This article deals with the problem of insufficient provision of credit resources to agricultural enterprises in Ukraine, which hinders the further development of production in the industry and increases its share in the country's GDP. Bank lending of agricultural production remains limited due to the fact that banks still consider agricultural enterprises to be objects of high risk and low creditworthiness, and in the segment of agricultural lending, they prefer large enterprises that audit their financial statements and insure crops. A noticeable demand for loans from farmers is constrained by high interest rates, the prevailing short-term nature of loan agreements, the requirements for high advance payments, floating charge or guarantees. The point of the article is to show the possibilities of expanding lending of agricultural enterprises both through bank lending and alternative forms and types of agricultural lending, such as leasing, promissory note lending or a combination of various forms and instruments. These forms are more "tolerant" to farmers than bank lending. Comparative calculations made on the materials of a number of Ukrainian banks confirmed that lease payments are lower than on the loan, and on the avalized bill of exchange are lower than on leasing. In addition, these forms allow you to avoid high advance payments, strict requirements for property collateral, for a positive credit history, and guarantees, which are the main barrier to obtaining loans by farmers. The use of these forms and types of lending will expand the ability of farmers to obtain credit resources of their need and optimize the price of credit resources and business taxation.