scholarly journals Application of the Best International Experience when Developing a Credit Guarantee System for Small and Medium Agricultural Enterprises of Ukraine

2021 ◽  
pp. 147-159
Author(s):  
Yurii LUPENKO ◽  
Svitlana ANDROS
Keyword(s):  
Agricultural Sector ◽  
Arable Land ◽  
Bank Lending ◽  
International Experience ◽  
Production Costs ◽  
Added Value ◽  
Agricultural Enterprises ◽  
Loan Guarantee ◽  
Guarantee System ◽  
Credit Guarantees

The focus of the article is the study of the best international experience in developing the structure and implementation of a loan guarantee system to reduce and distribute risks in financing small and medium-sized agricultural enterprises. Access to finance was identified as the main problem hindering the development of small and medium-sized agricultural enterprises. It has been substantiated that due to its competitive advantages, such as a large area of arable land, low production costs and the possibility of increasing the added value of products, the agricultural sector is a priority sector of the economy. The main obstacles and problems that hinder access to financing and the development of national small and medium agribusiness are identified. It has been substantiated that credit security programs play an important role in reducing restrictions on bank lending to small and medium-sized agricultural enterprises. The basic principles of the implementation of guarantee programs carried out with state participation are given. It has been proven that credit guarantees are one of the tools widely used to support the agricultural sector of the economy. In this case, the most expedient is the issuance of guarantees that provide a partial volume of lending, when the borrowers also bear some responsibility for the return of the funds received. Based on the consideration of international experience, it is concluded that loan guarantee systems are an effective tool that can alleviate the difficulties of entering the credit market for small and medium-sized agricultural enterprises. Key policy directions are proposed that allow correcting the situation with obtaining financing for small and medium-sized agricultural enterprises. The mechanism has been developed to provide state credit guarantees to small agricultural producers. The most effective implementation of the proposed mechanism can be achieved by building a national loan guarantee system with the formation of special institutions specializing in providing investment and innovation projects. The theoretical provisions formulated in the article can serve for further developments in the field of small business support by financial and credit institutions.

The system of credit guarantees as a tool to increase financing for small and medium-sized agricultural enterprises

Ekonomika APK ◽  
2021 ◽  
Vol 317 (3) ◽  
pp. 6-19
Author(s):  
Yurii Lupenko ◽  
Svitlana Andros
Keyword(s):  
Financial Support ◽  
Agricultural Sector ◽  
International Experience ◽  
State Regulation ◽  
Bank Loan ◽  
Industrial Complex ◽  
Agricultural Enterprises ◽  
Credit Guarantees ◽  
Effective Instrument ◽  
Conceptual Foundations

The purpose of the article is, based on the analysis of the best international experience, to formulate theoretical aspects and offer recommendations aimed at developing an effective system of credit guarantees to increase financial support for small and medium-sized agricultural enterprises. Research methods. In the process of research, depending on the goals and objectives, the following methods of cognition and analysis of economic processes were used: theoretical generalization - when substantiating theoretical provisions on the functioning of the system of credit guarantees; statistical comparisons - in identifying and assessing the effectiveness of state regulation of the system of financing small and medium-sized businesses; analysis of hierarchies - when determining promising ways of financial support for small and medium-sized agricultural enterprises; systemic method - in assessing the effectiveness of government regulation of the system of credit guarantees as one of the key tools widely used with the support of enterprises in the agricultural sector of the economy; expert assessments - when systematizing the main guarantee schemes and types of guarantee products and restrictions on their practical application; analysis and synthesis, induction and deduction, comparison - in the study of international experience in the implementation of guaranteed lending programs and consideration of the existing schemes for organizing this activity. Research results. The main provisions of the development of the system of financial support for small and medium-sized agricultural enterprises are formulated and methodological approaches to its improvement in the context of reforming the national economy are developed. The expediency of the development of programs for providing loans was determined, taking into account their role in reducing the restrictions on lending by banks to small and medium-sized agricultural enterprises. Conceptual foundations for the implementation of guarantee programs carried out with state participation have been developed. It has been established that targeted long-term and medium-term loans and guarantees allow covering the risks associated with agricultural activities by providing financial resources for the development of production. The necessity of developing a system of credit guarantees as the most effective instrument of financial support for enterprises in the agricultural sector of the economy has been proved. It was found that a good result can be achieved through the provision of guarantees that provide a partial amount of credit, when the farmer also bears some responsibility for the return of the funds received. Scientific novelty. Conceptual foundations for the development of a loan guarantee system have been developed The introduction of government measures aimed at increasing the volume of lending to small and medium-sized agricultural enterprises is proposed. The system of credit guarantees was further developed as the most effective instrument capable of alleviating difficulties in obtaining a bank loan for small and medium-sized agribusiness. On the basis of the best international experience, the national system of guaranteeing loans was improved with the formation and functioning of specific financial institutions (funds) specializing in ensuring the provision of commercial loans to enterprises of the agro-industrial complex. Practical significance of the article lies in bringing the theoretical and methodological provisions to the level of practical recommendations in the development of national measures for financial support and stimulation of the development of small and medium-sized agricultural enterprises in Ukraine. The formulated provisions, conclusions and recommendations are of interest to managers and employees of enterprises in the agricultural sector of the economy. The research materials can be used in the activities of guarantee organizations, financial and credit institutions, government bodies. Tabl.: 2. Figs.: 2. Refs.: 19.

scholarly journals Credit guarantees in Ukraine’s agriculture: a development mechanism based on international practices

2021 ◽  
Vol 188 (3-4) ◽  
pp. 85-97
Author(s):  
Andrii Starodubtsev ◽  
◽  
Yulia Bakai ◽  
Keyword(s):  
Agricultural Land ◽  
Small And Medium Enterprises ◽  
Arable Land ◽  
State Regulation ◽  
Partial Credit ◽  
Credit Guarantee ◽  
Agricultural Enterprises ◽  
Guarantee System ◽  
Credit Guarantees ◽  
Medium Enterprises

The paper deals with the conceptual approaches to the credit guarantee system as an effective mechanism of state support for agriculture. The importance of introducing a credit guarantee system in Ukraine and creating the Fund for Partial Credit Guarantee in Agriculture, a specialized non-banking financial institution, is emphasized. This will help to overcome obstacles to crediting small and medium agricultural enterprises. The authors have analyzed global credit guarantee schemes. The purpose of this paper is to develop proposals for amendments to the Draft Law «On the Fund for Partial Credit Guarantee in Agriculture», in particular a need to provide legal grounds for non-banking financial institutions, the form of business entities, their mission, criteria for agricultural subjects eligible for partial credit guarantees, financing of the relevant institutions and defining the related management bodies, as well as bodies of state regulation and supervision. The problem statement is attributable to the fact that the effectiveness of institutions providing credit guarantees for small and medium enterprises in agriculture plays an important role in the national economies of most countries. The authors have proposed an approximate financial model of the Fund for Partial Credit Guarantee in Agriculture and made the required economic calculations. Thus, with an initial authorized capital of EUR 10 million, the Fund for Partial Credit Guarantee in Agriculture, with 50% coverage, is able to provide guarantees for the purchase of 25 thousand hectares of arable land by small and medium enterprises at an average cost of EUR 820/ha, taking into account the average normative monetary assessment of agricultural land by regions. Consequently, credit enforcement will allow banking institutions not only to balance credit risk, but also to open access to small and medium agricultural enterprises to bank crediting to the extent necessary for the purchase of agricultural land and investments in production.

scholarly journals Major tendencies in livestock changes after the EU accession

2014 ◽  
Vol 3 (2) ◽  
pp. 422-428
Author(s):  
Levente Komarek
Keyword(s):  
Large Scale ◽  
Agricultural Sector ◽  
Arable Land ◽  
Animal Production ◽  
Living Standards ◽  
Production Costs ◽  
Production Structure ◽  
Industry Chain ◽  
The Eu

In the mid 80s Hungarian agriculture belonged to the forefront of the world in many respects, despite the fact that there was a lot to do regarding yields, production costs, production structure, and the fastness of adaptability to markets and establishing accordance between the elements of the food industry chain. The mid 1980s witnessed an energetic improvement despite the unequal pace, and then followed an era of different tensions and imbalances in Hungarian agriculture. At the time of the regime change the agricultural sector, and particularly animal production within that, suffered from the signs of crisis and it was getting into an increasingly difficult position. The vast majority of the agricultural large scale farms ceased to exist, and most of the arable land was privatised. Production fell back, its composition became more heterogeneous, sometimes with an irrational production structure and selling difficulties arouse. Profitability decreased in the field of animal production generally, and some activities even had losses. The domestic consumption fallback, which was caused by the farmers’ lack of capital, the unorganised production, and the decrease in living standards, produced an amount of unsellable goods and it made the otherwise low profitability even worse. The low level of profitability resealed in unjustified production decline and led to the fact that the number of domestic animals in Hungary decreased to a never experienced depth. Today there are positive changes in the field of animal production, which might result in the long-term growth of our livestock. This study was designed to present the major tendencies and spatial characteristics of Hungarian livestock.

Теоретичні аспекти сутності банківського кредиту та особливості кредитних відносин в аграрному секторі економіки

Ekonomika APK ◽  
2021 ◽  
Vol 319 (5) ◽  
pp. 101-112
Author(s):  
Iryna Tomashuk
Keyword(s):  
Agricultural Sector ◽  
Bank Lending ◽  
Practical Significance ◽  
Agricultural Credit ◽  
Economic Relations ◽  
Agricultural Enterprises ◽  
Theoretical Substantiation ◽  
Analysis And Synthesis ◽  
Banking Institutions ◽  
The Impact

The purpose of the article is to study and comprehend the essence of credit as a basic economic category and identify the features of bank lending in the agricultural sector of the economy. Research methods. In the process of research a number of methods were used: abstract-logical - for structuring and theoretical substantiation of the essence of the categorical apparatus of credit and credit relations; methods of comparative analysis and synthesis - to study the evolutionary aspects of credit development and credit relations in society; monographic - in identifying and systematizing the characteristics of credit relations in the agricultural sector of the economy; structural and functional approach for the formation of a conceptual vision of credit as an economic category and providing the specifics of the system of bank lending to agricultural enterprises; graphic - to illustrate and systematize the results of the study. Research results. The ambiguity of the interpretation of the credit category in the modern economic literature is revealed. It is proposed to consider the loan as a system of organizational and economic relations between the lender and the borrower, legally enshrined in the loan agreement, on the provision of funds for temporary use on terms of payment, maturity, intended use, security and return. The dualistic nature of credit efficiency is identified and analyzed. The fundamental nature of the impact of the specifics of agriculture on credit relations in the agricultural sector of the economy is assessed. The legitimacy of the existence of a separate mechanism of credit relations in the agar sector of economies is proved. The essential characteristics and features of agricultural credit are systematized and the priority features of objects of crediting in agriculture are covered. Scientific novelty. Theoretical aspects of structuring the interpretation of the essence of credit and credit relations have been further developed. Substantiation of structural components and features of bank lending of the agar sector of the economy. Practical significance. The results of the study can be used by public and sectoral authorities, as well as banking institutions in developing measures to enhance lending to the agricultural sector of the economy. Tabl.: 1. Figs.: 3. Refs.: 31.

scholarly journals Gross domestic product and critical infrastructure

2021 ◽  
Vol 2021 (2) ◽  
pp. 25-43
Author(s):  
Volodymy KULYK ◽  
Keyword(s):  
Service Sector ◽  
Agricultural Sector ◽  
Critical Infrastructure ◽  
Production Costs ◽  
Added Value ◽  
Gdp Growth ◽  
Total Production ◽  
Consumer Spending ◽  
The Impact ◽  
Final Consumer

GDP is considered as a critical infrastructure that characterizes the global interaction of consumers and manufacturers of the final product in the national economy. For the analysis and modelling of GDP, the Leontiev model is used to analyze and to model GDP as a critical infrastructure, where costs are interpreted in two ways - as consumer spending and as producer costs. This allows you to determine the degree of their influence on each other through the established production structure. Based on Leontiev's aggregated three-sector model, two scenarios were modelled: a) the impact of final consumer spending on output and the formation of added value and b) the impact of changes in added value on output and final consumer spending. The model includes three sectors – the agricultural sector, industry and service sectors. In the first scenario, the increase in the final consumed product in the agricultural sector by 1000 yen causes an increase in output in the agricultural sector by 1153.5 yen, in industry by 594.4 yen and in the service sector by 358.1 yen. At the same time, total production costs will increase by 1106.0 yen; added value will increase in the agricultural sector by 549.8 yen, in industry – 216.8 yen, in the service sector – 233.4 yen. The volume of production growth can be determined only through the Leontiev model. In the second scenario, an increase in added value in the agricultural sector by 1000 yen brings about an increase in output in the agricultural sector by 1153.5 yen, in industry by 1470.4 yen and in the service sector by 480.7 yen. For both scenarios, the assessment and verification of calculations of GDP growth and output are carried out by the balance method – output and GDP growth is described within the Leontiev model. The three-sectoral model is useful for educational purposes, scientific research; to reach the method in a specific example. The approach can be extended to models of greater dimension and large size.

scholarly journals Diversification as a strategic direction for sustainable development of enterprises in the agricultural sector of the economy

2021 ◽  
Vol 2 (99) ◽  
pp. 326-336
Author(s):  
S. Sokolyuk ◽  
◽  
M. Koroteev ◽  
O. Zharun ◽  
O. Tupchiy ◽  
...  
Keyword(s):  
Large Scale ◽  
Agricultural Sector ◽  
Raw Materials ◽  
Environmental Safety ◽  
Financial Economic ◽  
Raw Material ◽  
Added Value ◽  
Industrial Processing ◽  
Agricultural Enterprises ◽  
Rational Combination

The diversification of the activities of agricultural enterprises is considered as a process of mastering the production of new or expanding the range of traditional types of products, which makes it possible to more fully realize the existing natural, biological, resource, production potential and helps to strengthen financial, economic and environmental safety, increases the competitiveness and efficiency of economic entities. Today, the need to diversify the activities of domestic agricultural enterprises is determined by a set of prerequisites, both general economic and specific. In modern realities, the overwhelming majority of farmers are focused on the production of the most liquid and least capital- and labor-intensive types of products with a short payback period. The economic results of agricultural enterprises in most cases directly depend on the efficiency of production of grain and oilseeds. Narrow specialization, and sometimes practically monoculture, increases the threats of agrobiological, ecological, and economic nature Diversification of their activities allows minimizing the risks of agricultural enterprises from unfavorable phenomena of agrotechnical and weather-climatic nature and unforeseen changes in market conditions. Optimization of the sectoral structure on the basis of a rational combination of the main, additional, and subsidiary industries ensures more efficient use of land and means of production, leads to the leveling of seasonality, and creates conditions for an enterprise to receive a guaranteed stable income. The priority for the diversification of large-scale agricultural production is its investment and innovative development with a rational combination of crop and livestock industries, the revival of the traditional for Ukraine industries of beet growing, vegetable growing, horticulture, cattle breeding, pig breeding, sheep breeding. Diversification of the activities of small and medium-sized producers provides for an orientation towards the production of products with a high level of labor intensity, environmentally friendly organic products, niche agriculture, the production of non-traditional agricultural products, green, agritourism, etc. The need to change the raw material nature of the agricultural sector of the Ukrainian economy determines the need to increase the industrial processing of agricultural raw materials. This will not only make it possible to obtain greater added value, but will also ensure the creation of additional jobs, will contribute to the growth of incomes of the population, and an increase in the revenues of budgets of all levels. The development of diversification processes guarantees a stable income and an increase in the profitability of agricultural producers and will also contribute to the implementation of national priorities for ensuring the country's food security, increasing employment, and solving social and material problems of peasants.

FINANCIAL COMPONENT OF THE FOREIGN TRADE ACTIVITIES INFRASTRUCTURE OF THE AGRICULTURAL SECTOR SMALL BUSINESS ENTITIES

2018 ◽  
Author(s):  
Liudmyla Bakhchivanzhi ◽  
◽  
Oleksandr Barbinyagra ◽  
Keyword(s):  
Foreign Trade ◽  
Agricultural Sector ◽  
Financial Analysis ◽  
Equity Capital ◽  
Net Income ◽  
Agricultural Enterprises ◽  
Credit Guarantees ◽  
The Government ◽  
Business Entities ◽  
Normative Value

The article reflects the results of the study of the financial component of the foreign trade infrastructure formation, taking into account the peculiarities of export entrepreneurship of small entities of the agricultural economic sector. The methodological toolkit of the article is built on the basis of a systematic approach using the financial analysis and abstract-logical generalization of research results. It was revealed that agricultural enterprises currently, according to the World Trade Center, have a significant under-traded export potential due to imperfection and insufficient capacity of the infrastructure to support foreign trade, and measures to form and expand the infrastructure of foreign trade require appropriate financial and investment support. The state of funding sources was analyzed and diagnostics of the financial state of the agricultural sector was carried out in the context of the analysis of the dynamics of indicators of the financial state, for which the normative value is not established and the indicators, the assessment of which is carried out in comparison with the normative value. A tendency towards a decrease in the profitability of assets and equity capital, an excess of the growth rate of accounts payable over accounts receivable, current liabilities over current assets, cost over net income from product sales, as well as a downward trend in financial results from operating activities and net profit are revealed. It was found that the financial activities of agricultural enterprises did not allow them to achieve the required level of their own and borrowed resources to finance the development of foreign trade infrastructure. The institutional factors of the internal and external (international) environment of the foreign trade financial infrastructure formation are analyzed. In order to overcome the existing destructive tendencies, it is proposed to search for foreign markets with higher prices for agricultural products with an orientation to markets with a high under-traded export potential. It is proposed to use the terms of cooperation to ensure accessibility to external sources of financing and innovative financial instruments for small and micro-agricultural enterprises, to directly provide trade financing or credit guarantees by the government.

Bank Lending to Agriculture in a Small Developing Country

2015 ◽  
Vol 14 (4) ◽  
pp. 393-412
Author(s):  
Azmat Gani ◽  
Frank Scrimgeour
Keyword(s):  
Interest Rates ◽  
Developing Country ◽  
Commercial Bank ◽  
Government Spending ◽  
Food Production ◽  
Agricultural Sector ◽  
Arable Land ◽  
Bank Lending ◽  
Development Bank ◽  
Significant Drop

This paper explores bank lending to agriculture in Fiji, a small developing country. It examines bank lending by bank type—commercial bank lending and lending by the Fiji Development Bank (fdb), a non-commercial bank. The findings reveal the importance of both banking types as well as a significant drop in lending since 1993, despite the need to fund the agricultural sector to boost food production activities. Interest rates, government spending and food production strongly determine fdb lending to agriculture. The availability of arable land has a negative and significant effect on fdb lending to agriculture. The results show commercial banks are performing a slightly different role in the agricultural sector than the Fiji Development Bank; they appear to be unresponsive to economic variables that the fdb is responsive to.

scholarly journals Rental Income Structure in Economy as a Basis for Sustainable Agrarian Relations in the Agro-Industrial Complex

2020 ◽  
Vol 12 (18) ◽  
pp. 7287
Author(s):  
Andrey Zaytsev
Keyword(s):  
Agricultural Sector ◽  
State Regulation ◽  
Added Value ◽  
Industrial Complex ◽  
Pricing Policy ◽  
Dynamic Regulation ◽  
Agricultural Enterprises ◽  
The Russian Federation ◽  
Methodological Approaches

Modern features of the development of the agro-industrial complex as part of the economy as a whole require changes in the traditional models of state regulation, which do not take into account the structure of rental income in the economy and do not use the capabilities of the relevant instruments. This is reflected in the insufficient efficiency of subsidies provided by the state to agricultural enterprises and the preservation of high social and infrastructural differentiation of the regions, as well as the dependence of the agricultural sector on the pricing policy of other industries. All this is shown by the example of the analysis of statistical data of regions of the Russian Federation for 2011–2019. To eliminate these problems, theoretical and methodological approaches have been developed, which made it possible to substantiate the concept of regulating the sustainability of agricultural relations through the synthesis of the theory of sustainability, the theory of systems, and rental theory. Within the concept the role of the structure of rental income in the formation of sustainability of agrarian relations, in their qualitative content, and in the redistribution of added value from the agrarian sphere in monopolized spheres is revealed. The possibility and necessity of state regulation of the agrarian sphere on the basis of dynamic regulation of the sustainability of agrarian relations with the help of management of the rent mechanism is substantiated.

scholarly journals FINANCING OF THE AGRO-INDUSTRIAL COMPLEX IN THE CONTEXT OF THE IMPLEMENTATION OF INTERNATIONAL EXPERIENCE

2021 ◽  
Vol 3 (38) ◽  
pp. 341-350
Author(s):  
R. Sodoma ◽  
O. Brukh ◽  
T. Shmatkovska ◽  
N. Vavdiiuk ◽  
A. Bilochenko ◽  
...  
Keyword(s):  
Agricultural Sector ◽  
Financial Sector ◽  
Developed Countries ◽  
International Experience ◽  
Research Approach ◽  
Industrial Complex ◽  
Financial Instruments ◽  
Agricultural Enterprises ◽  
Industrial Enterprises ◽  
Low Efficiency

Abstract. The situation on the market of bank crediting of agricultural enterprises is analysed. Have been identified the key reasons for the low efficiency of the current mechanism of lending by banks to the agro-industrial sector. The key shortcomings in the system of financing the enterprises of the agro-industrial complex are revealed. The investment attractiveness in Ukraine is considered and specified in the dynamics by regions. The volumes of financing the activity of agro-industrial enterprises in Ukraine by sources of income are analysed. It is proved that effective financing opens wide opportunities for the development of enterprises in the agricultural sector. In the study general and specific economic methods, as well as a basic research approach, which allowed us to determine the economic nature of the financial sector and the scope of financing of agricultural enterprises are used. The financial instruments of the agricultural enterprise use of which will promote the achievement of the European standards are offered. Scientifically substantiated recommendations on the directions of application in Ukraine of the international experience of stimulation of the financial activity of subjects of the agro-industrial complex are entered. In developed countries, a rich arsenal of support tools is used to support financial activities in the agro-industrial complex. A list of the most common tools for such support used in developed countries is given. It is noted that the solution of problems of financial support for the development of the agro-industrial complex should be carried out on the basis of studying, generalizing, and taking into account the best international experience. The world experience of financing the agricultural sector of the economy and the peculiarities of the distribution of state subventions for the development of agricultural production are studied. The scientific novelty of the obtained results is represented by a set of theoretical and practical aspects of the study, namely proposals for the current state of lending to agriculture and recommendations for the use of new financial instruments in the context of the implementation of international experience. Keywords: crediting, financial sector, agro-industrial complex, international experience. JEL Classification Q14 Formulas: 0; fig.: 5; tabl.: 2; bibl.: 16.

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