Institutional factors contributing to the stagnation of the bank lending market in Ukraine and ways of its overcoming

Introduction. Expanding credit support for the economy in conditions of full-scale war is a necessary and important factor for its sustainable reproduction, reconstruction of destroyed assets and development of industrial production. However, the development of lending in the conditions of war cannot take place according to peaceful approaches. Problem Statement. In crisis conditions the effect of liberal market mechanisms is limited by non-market risks, that is why the bank lending market needs state support. At the same time, in the war of attrition, in order to effectively support economic activity, the priorities of bank lending in the state must also change. However, a number of institutional gaps in the credit market of Ukraine are currently preventing this task from being solved. Purpose. On the basis of the theoretical and empirical aspects of the stagnation of the bank lending market, to identify institutional obstacles to the development of the credit market of Ukraine and propose a set of measures in terms of state policy to strengthen its targeting in the interests of military endurance. Methods. In the course of the research, general scientific and special methods were applied, in particular: statistical analysis, grouping, description, comparison, theoretical generalization and abstract logical methods. The results. The analysis of bank lending for 2014-2023 revealed its structural degradation, which is manifested by a decrease in the share of long-term loans, as well as a drop in the volume of lending in the industry, construction sectors and residential mortgages, which are most in demand for the development of the economy. A number of institutional gaps in the credit system of Ukraine have been identified, which manifest themselves: firstly, in the weakness of state policy in the field of crediting development of the economy; secondly, due to the peculiarities of the monetary policy of the NBU under the strict inflation targeting regime; thirdly, due to the deformation of the mechanism of corporate financing and the underdevelopment of the institute for working with bad assets (bad loans). Conclusion. The authors proposed a set of measures regarding state policy to solve the problem of stagnation of bank lending to the economy and strengthen its targeting in the interests of military endurance in separate areas: approval of the list of priority industries and enterprises to facilitate the scoring of credit applications and their further support by state tools; to intensify lending to the economy through state banks within the framework of state programs of economic development; to revise the monetary policy in the direction of harmonizing the interests of price stability with the needs of credit support of the economy. The expediency of introducing preferential regulatory requirements of the NBU to state-owned banks, in particular with specialization, taking into account their differences and powers, as well as optimizing targeted preferential lending programs; ways of restoring the attractiveness of Ukrainian enterprises as borrowers are outlined. Recommendations have been made to simplify the procedures for write-off/sale of non-performing assets.