DEVELOPMENT OF SMALL AND MEDIUM BUSINESS IN UKRAINE WITH FUNDING FROM THE EUROPEAN UNION

• Main Authors: Olena Parubets, Olena Boiko, Dmytro Suhoniako
• Format: Article
• Language: English
• Published: Izdevnieciba “Baltija Publishing” 2019-05-01
• Series: Baltic Journal of Economic Studies
• Subjects: small and medium-sized business, financing, development, financial resources, loans, financial institutions
• Online Access: http://www.baltijapublishing.lv/index.php/issue/article/view/648
• ISSN: 2256-0742; 2256-0963

Crisis phenomena in Ukraine have led to the reduction in volumes of state financial and credit and investment support for the development of subjects of small and medium-sized business (SMB) and, as a consequence, the reduction of their export potential. Ukrainian SMB receives considerable advisory and technical assistance due to the implementation of projects and programs in the area of the EU and European financial institutions. Despite economic expediency of development of financial cooperation with European structures, a situation appears in Ukraine that SMB entities have no sufficient information about the possibility to participate in European projects and programs or the realization of the latter in full volume is impossible over bureaucratic hurdles. The purpose of the article is to study volumes and directions of SMB financing in Ukraine at the expense of EU programs, identify problems occurring in the process of obtaining external financial sources, and to develop directions of their solution. In order to achieve the set purpose, the paper solves the following tasks: to study conditions of providing financial and credit assistance to Ukrainian SMB from the EU and European financial institutions; reveal problems appearing on the way of development of financial cooperation of the SMB with the abovementioned institutions; develop recommendations in relation to the improvement of financial support tools of the SMB. Methods. In the process of the study, general scientific methods are used, namely, economic and statistical, analytical – to analyse the current state of financing of the SMB development in terms of EU projects and programs; analysis, synthesis, logical generalization – to reveal problems in the SMB external financing and areas for their elimination. Results. On the basis of conducted analysis of financial and credit assistance to Ukrainian SMB provided within the programs and projects of the EU and European financial institutions, their positive influence on the results of enterprise activities was revealed and the main problems of the development of further financial cooperation were identified. For their solution, it is proposed to use new financial instruments providing for the development of co-financing programs, the formation of venture funds, and development of financial relations within the public- and municipal-private partnership. Novelty/originality. Novelty and originality of the research carried out are in the solution of the scientific and practical problem of external financing of Ukrainian SMB from the EU and substantiation of recommendations aimed at the intensification of state and local executive authorities’ participation in the development of financial cooperation with European financial institutions.