Bank Lending Trends in Ukraine

The bank lending to economic entities is one of the factors that play an important role in the development of priority industries, ensuring economic growth and forming the country’s competitiveness in the world market. The development of the banks’ lending activities is the main element of a strong economic environment and will affect the assurance of the state’s independence and realization of its national interests under the conditions of globalization processes. The main role in stimulating the reproduction processes in the economy is played by bank lending as the main source of providing monetary resources for current and investment activities of business entities. However, macroeconomic instability in Ukraine had a negative impact on the development of bank lending, causing a sharp decline in the creditworthiness of borrowers and a significant deterioration in the loan portfolio quality. The banking system in Ukraine has some problems that require improvement and changes in its functioning mechanisms. To develop bank lending and create financial stability, it is necessary to make banking services more qualitative in order to improve their competitiveness; to improve procedures in the banking sector, such as reorganization and liquidation of banks; to encourage commercial banks to lend innovative projects; to increase capital resources of state-owned banks, increase their number and strengthen their role in the financial and credit market in Ukraine. The above measures can contribute to recovery of the national economy and improvement of the overall condition of banking institutions.