Alternative Crediting in the Agrarian Sector of Ukrainian Economy: P2P-Crediting to Farmers

• Main Authors: Chechotkin Volodymyr V., Prystemskiy Oleksandr S.
• Format: Article
• Language: English
• Published: Research Centre of Industrial Problems of Development of NAS of Ukraine 2020-03-01
• Series: Bìznes Inform
• Subjects: p2p crediting; fintech; financial innovation; crowdfunding; agrarian economy sector; farming enterprises
• Online Access: https://www.business-inform.net/export_pdf/business-inform-2020-3_0-pages-98_103.pdf

The article considers the possibility of alternative crediting to small farming enterprises, as credit is a form of movement of loan capital and an integral attribute of the economic management mechanism for all economic entities. In addition, the use of borrowed funds has a positive impact on the financial activities of agricultural producers. These funds include: increasing the producer’s financial potential; providing an opportunity to accelerate the turnover of investments; increasing the return on equity. Many small farming enterprises can not get the necessary crediting from banks because of lack of turnover in financial statements, lack of collateral, bad credit history. Beyond that, the low level of liquidity of banking activities along with the political processes in Ukraine have led to a conservative policy of crediting to the agricultural sector. The emergence of new business models in the financial sector can be one of the most modern and effective instruments for attracting credits. Therefore, the article considers the possibility of introducing P2P crediting for small farming enterprises – borrowing financial resources provided without collateral, from private investors. Special credit programs, which domestic banks develop for agricultural producers, have been analyzed. Modern and efficient instruments for attracting credit resources are considered. The process of applying for a loan through the Internet site is described. The benefits of P2P crediting for the agricultural producer are allocated. Its shortcomings for both the investor and the borrower have been formulated. Steps to promote Internet crediting and increase financial resources in the agrarian sector of the economy are proposed.