№ 8/2018

Fìnansi Ukr. 2018 (8): 75–90https://doi.org/10.33763/finukr2018.08.075

MONETARY POLICY

BORTNIKOV Gennadiy ¹

¹SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0001-8388-6721

Financial support for small and medium business lending by public guarantees

Monitoring the lending market in Ukraine reveals that lending conditions for small and medium-sized enterprises (SME) in terms of collateral and interest rates are eased, and SME’s demand for loans is growing. Nevertheless, the survey of domestic entrepreneurs shows that too high-interest rates and excessive requirements to collateral remain key factors forcing companies to prevent from borrowing. High credit risk and weak protection of the creditors’ rights are followed by the lack of own capital in SMEs, which narrows the availability of their own assets as eligible pledge for lenders. The purpose of the paper is to determine an acceptable framework of state guarantees for Ukrainian SME based on the best international experience and provide practical recommendations on the evaluation of expected outputs of the state guarantee scheme. It is expedient to adopt the act on the guarantee of SME loans and remove bureaucratic obstacles in the development of the state scheme of guaranteeing loans supported by Ukrainian government counter-guarantees. As a result of the implementation of the pilot guarantee program by the German-Ukrainian fund, it is advisable to create several schemes to support SMEs, with focuses on specific regions, sectors, innovative enterprises and start-ups. The disclosure of information by the central bank about defaults on guaranteed loans, the structure of loans by sectors, impact on employment, timing and purpose are worthy of further scientific study and will promote the optimization of the guarantee scheme and increase the efficiency of local and state budgets funding.

Keywords:entrepreneurship, state policy, state support, lending, small and medium business, financial support of entrepreneurial activity

JEL: G24, G28, L26, M21

Bortnikov G. . Financial support for small and medium business lending by public guarantees / G. . Bortnikov // Фінанси України. - 2018. - № 8. - C. 75-90.

Article original in Ukrainian (pp. 75 - 90)

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