LENDING MECHANISM FOR BORROWERS BY BANKS IN MODERN ECONOMIC REALITIES

Abstract

The article is devoted to the study of the peculiarities of bank lendingat the present stage. The essence of the concepts «bank credit» and «bank lending» is considered. The interpretation of the loan by domestic scholars and the Law of Ukraine «On Banks and Banking» is analyzed. The essence of financial assets under IAS 32 «Financial Instruments: Presentations» is considered. The stages of the bank’s credit process for providing loans to borrowers are highlighted. The essence of the preliminary, preparatory, main and final stages is investigated. The significance, tasks and main components of the bank’s credit policy are identified. The components of the Regulation on the bank’s credit policy are considered. The requirements to the size of the authorized capital of the bank are analyzed. The reasons for the negative dynamics of the number of commercial banks in Ukraine for the period 2016-2020 are studied. The decrease in the share of the loan portfolio in the structure of gross domestic product from 2016 to 2019 is revealed.The peculiarities of the State Program «Affordable Loans 5-7-9%» aredescribed, which allows to cover current needs and finance large-scaleprojects. The reduction of interest rates on deposits and loans during thethird quarter of 2020 is analyzed. The reasons for the decrease in the share of «non-performing» bank loans in 2020 are described. It is established that the intensification of bank lending is possible by reducing the level of riskiness of investment loans and improving approaches to managing existing risks. The process of minimizing risks involves identifying them, identifying sources and establishing the amount of information needed to assess the level of risk; selection of criteria and determination of methods for assessing their level; analysis of risk management results.In general, the activity of banks and the state of the country’s economyundoubtedly depend on a rational and balanced state policy. Public policyshould be aimed at encouraging investment activity, stimulating investment in the economy, ensuring the stability of the banking sector. The development of the banking sector in general and the stimulation of the bank’s lending operations cannot develop without the lack of political and economic stability in the country.