Kravchenko, CREDIT SUPPORT FOR THE DEVELOPMENT OF BUSINESS ENTITIES IN AGRICULTURE IN WARTIME CONDITIONS

S.A. Kravchenko, Sc.D., professor,
NSC “Institute of Agrarian Economics” NAAS

CREDIT SUPPORT FOR THE DEVELOPMENT OF BUSINESS ENTITIES IN AGRICULTURE IN WARTIME CONDITIONS

In 2023, about UAH 1 billion is expected for state support of business entities in agriculture, in particular: support for farms and other producers of products - UAH 796 million from a special fund; Financial support for business entities in agriculture – UAH 205 million from the general fund. Since the beginning of 2023, 11.6 thousand business entities in agriculture of Ukraine have received UAH 60.1 billion in bank loans. Under the state program "Affordable Loans 5-7-9%", 9 thousand business entities were financed for UAH 34.8 billion. Since the beginning of 2023, banks have issued 21 thousand loans to businesses for UAH 75 billion. Since the beginning of the program (February 2020), 74 thousand loans worth UAH 241.9 billion have been issued, the Ministry of Economy of Ukraine said in a statement. Most of all, entrepreneurs took anti-crisis loans - UAH 60.2 billion and loans for anti-war purposes - UAH 54 billion [1, p. 131].
As of early October 2023, 235 entrepreneurs received loans under the government program "Affordable Loans 5-7-9%" for a total of UAH 1.3 billion. UAH 28.1 billion was issued for refinancing of pre-received loans, UAH 36.7 billion for replenishment of working capital, and UAH 18.9 billion for investment purposes. Commodity producers received UAH 35 billion of loans to support their activities, trading companies took UAH 4.5 billion of loans to replenish working capital. 45 banks take part in the program, the largest number of loans was issued by Privatbank (34.2 thousand), Oschadbank (10.9 thousand) and Raiffeisen Bank Aval (5.4 thousand). At the beginning of 2022, the share of participation of business entities in agriculture in the program was 53%.
The European Bank for Reconstruction and Development (EBRD) is launching strategic cooperation with PrivatBank with a €60 million risk sharing instrument that will support the provision of new €240 million in loans to businesses in agriculture and other critical sectors of Ukraine. The guarantee, consisting of two parts, will cover up to 50% of the credit risk on new loans of PrivatBank, but not more than 50% of the portfolio. With the conclusion of this agreement, the total amount of new financing supported by the European Bank for Reconstruction and Development since the beginning of the war has increased to €708 million. At least 80% of the guarantees are provided under the Resilience and Livelihoods Programme, which the European Bank for Reconstruction and Development is implementing for Ukraine and neighbouring countries in response to Russia's military actions. Up to 20% (€48 million) of risk coverage will be used for loans that will support long-term investments by agricultural business entities in green technologies in accordance with European Union standards [2, p. 13].
Preferential financing conditions for business entities in agriculture are provided by PrivatBank thanks to the JCB FINANCE program. Within the framework of the JCB FINANCE program, it is possible to purchase JCB equipment with conditions from 0.01% per annum in hryvnia without the risks of currency fluctuations. A simplified model of consideration of applications is adopted with the amount of financing up to UAH 10 million for legal entities and up to UAH 2 million for individual entrepreneurs, provided that there is a sufficient level of solvency, a positive credit history and an impeccable business reputation. Advantages of the JCB FINANCE program: preferential financing rate from 0.01% per annum; financing in hryvnia without the risk of currency fluctuations; advance payment from 20%; financing term up to 5 years; no hidden fees; An opportunity to get a quick decision due to a simplified analysis of applications [3, p. 55].
More than 70% of PrivatBank's loan portfolio is dominated by financing of business entities in agriculture (2022-2023). It was possible to increase the amount of funding through state guarantees and support programs. If the volume of financing of fixed assets in 2021 amounted to UAH 2.3 billion, then in 2022 it was already UAH 2.4 billion. For 10 months of 2023, the purchase of equipment for UAH 3.9 billion was financed.
From October 1, 2023, entrepreneurs can receive financing under the state program "Affordable Loans 5-7-9%" for the entire model range of CLAAS equipment without commissions. In Oschadbank, the minimum contribution from the client is 20%, the loan term is up to 60 months. The main advantages of the program: reduced time for making a decision on lending; a simplified list of financial documents; preferential interest rate under the program without commissions; there are no requirements for appraisal and notarial registration of pledged property for the purchase of new and used equipment; the possibility of receiving part of the reimbursement of the cost of equipment from international donors; Prompt communication with a personal manager at the regional level [4, p. 77].
Thus, credit assistance in the development of business entities in agriculture corresponds to the conditions of the wartime system, but enterprises need to increase the volume of capitalization of production.

References:
Kravchenko S., Malik M., Shpykuliak O., Diuk A. (2023). Adaptive approach in the system of management and marketing research of business entities in agriculture. Methods of improving the economy, tourism and management : collective monograph / Andrushchak I., Chudovets V., Rechun O., etc. Іnternational Science Group. USA, Boston: Primedia eLaunch, p. 126-136. DOI: 10.46299/ISG.2023.MONO.ECON.1.3.3. URL : https://isg-konf.com/methods-of-improving-the-economy-tourism-and-management/.
Malik M., Kravchenko S., Diuk A., Malik L., Nechyporenko M. (2023). Development of micro-entrepreneurs in agriculture in wartime conditions. Ekonomika APK. 2023. Vol. 31, №. 2. p. 10-23. URL : https: // eapk.com.ua/ uk/ journals /tom- 30- 2- 2023/ rozvitok- sub- yektiv- mikropidpriyemnitstva- u- silskomu-gospodarstvi-v-umovakh-voyennogo-chasu.
Kravchenko S., Malik M., Shpykuliak O., Malik L. (2023). Supporting the development of family farming in wartime conditions. Scientific directions of research in educational activity : collection of works. Osaka : Japan, р. 54-56. URL : https://www.isg-konf.com/uk/scientific-directions-of-research-in-educational-activity/.
Kravchenko S., Malik M., Shpykuliak O. (2023). Ensuring sustainable development of rural housеholds in wartime conditions. Basics of learning the latest theories and methods : collection of works. Boston : USA, р. 76-78. URL : https://www.isg-konf.com/uk/basics-of-learning-the-latest-theories-and-methods/?utm_source=eSputnik-promo&utm_medium=email&utm_campaign=UA-Sbornik_materialov_konferencii_dostupen&utm_content=1487908645.