Specific Participation of Banks in the Program “Available Loans 5-7-9” in the Conditions of War

Abstract

The role of banks in supporting the functioning of business entities in wartime thanks to preferential lending introduced by the Cabinet of Ministers of Ukraine in 2020 is considered. It is proved that currently the national economy is operationally transferred to the “war rails”, and the main forces are thrown to support critical industries, mainly agriculture, therefore the priorities of business lending reflect exactly this trend. It is well-founded that with the beginning of the war in Ukraine banks are forced to adapt to new conditions of activity, offering new types of loans within the framework of the “Available loans 5-7-9” program for business relocation, for preventing and overcoming the consequences of Russian aggression, etc. An analysis of the lending directions of the TOP-10 participating banks of the “Available loans 5-7-9” program is conducted, which showed that among the pre-war lending directions most agreements were concluded with the aim of overcoming the negative consequences of COVID-19, and during wartime – with the aim of supporting agricultural producers to provide seed company. It is proved that during the war some banks postponed investment lending for the distant future and concentrated on working capital, primarily for agribusiness (JSC “Raiffeisen Bank Aval”, JSC “OTP Bank” temporarily suspended issuing loans for investment purposes. JSC KB “Privatbank”, JSC “Ukreximbank”, PJSC “Bank Vostok” temporarily suspended issuing loans for refinancing). TOP-10 banks that after February 24, 2022 refocused mainly on lending to the seed company and business support during wartime are provided. An analysis of the share of signed loan agreements for the support of the seed company and business support during wartime is carried out for the entire period of the program “Available loans 5-7-9” and during the period of martial law. Banks with the largest share of signed contracts for new lines of lending are noted (JSC KB “Privatbank” 96,84%, PJSC “Bank Vostok” 95,65%, JSC “Ukreximbank” 95,87%, JSC “Procredit Bank” 91,73%, JSC “Ukrgasbank” 91,38%) of all contracts signed during the war period. The characteristics of individual credit products of JSC CB “Privatbank”, JSC “Ukrgazbank”, JSC “Oshchadbank” in the conditions of martial law are carried out.