{"id":34830,"date":"2025-06-25T11:44:12","date_gmt":"2025-06-25T08:44:12","guid":{"rendered":"https:\/\/ces.org.ua\/?p=34830"},"modified":"2025-08-07T11:19:18","modified_gmt":"2025-08-07T08:19:18","slug":"how-to-facilitate-corporate-lending-in-ukraine-causes-of-stagnation-and-policy-recommendations","status":"publish","type":"post","link":"https:\/\/ces.org.ua\/en\/how-to-facilitate-corporate-lending-in-ukraine-causes-of-stagnation-and-policy-recommendations\/","title":{"rendered":"How to facilitate corporate lending in Ukraine: causes of stagnation and policy recommendations"},"content":{"rendered":"<p><iframe loading=\"lazy\" title=\"YouTube video player\" src=\"https:\/\/www.youtube.com\/embed\/zOJs2p4YyOw?si=ZzDM9PHSQDkBfDT6\" width=\"760\" height=\"415\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><span data-mce-type=\"bookmark\" style=\"display: inline-block; width: 0px; overflow: hidden; line-height: 0;\" class=\"mce_SELRES_start\">\ufeff<\/span><\/iframe><\/p>\n<h3 data-start=\"182\" data-end=\"194\"><\/h3>\n<p data-start=\"196\" data-end=\"383\">Since the onset of Russia\u2019s full-scale invasion, <strong data-start=\"245\" data-end=\"293\">Ukraine\u2019s banking system has remained stable<\/strong>, but <strong data-start=\"299\" data-end=\"342\">corporate lending has steadily declined<\/strong>. This trend stems from a combination of:<\/p>\n<ul>\n<li data-start=\"387\" data-end=\"418\">heightened war-related risks,<\/li>\n<li data-start=\"387\" data-end=\"418\">reduced credit demand from businesses,<\/li>\n<li data-start=\"464\" data-end=\"503\">structural barriers on the supply side.<\/li>\n<\/ul>\n<p data-start=\"505\" data-end=\"645\">While <strong data-start=\"511\" data-end=\"537\">private sector lending<\/strong> is essential for wartime resilience and post-war recovery, <strong data-start=\"597\" data-end=\"644\">access to affordable credit remains limited<\/strong>.<\/p>\n<p data-start=\"647\" data-end=\"936\">This study explores the <strong data-start=\"671\" data-end=\"714\">key drivers behind the lending slowdown<\/strong> and offers <strong data-start=\"726\" data-end=\"773\">practical solutions to expand credit access<\/strong>. Using national statistics, business surveys, and econometric modeling, it finds that <strong data-start=\"860\" data-end=\"915\">war-related shocks outweigh monetary policy factors<\/strong> like interest rates.<\/p>\n<hr data-start=\"938\" data-end=\"941\" \/>\n<h3 data-start=\"943\" data-end=\"959\">Key Findings<\/h3>\n<ul data-start=\"961\" data-end=\"2048\">\n<li data-start=\"961\" data-end=\"1231\">\n<p data-start=\"963\" data-end=\"1231\"><strong data-start=\"963\" data-end=\"1008\">War-related risks are the main constraint<\/strong>, reducing corporate loan volumes by <strong data-start=\"1045\" data-end=\"1071\">0.12% to 0.21% monthly<\/strong>.<br data-start=\"1072\" data-end=\"1075\" \/>Interest rates played a stronger role before the invasion but became less impactful in 2022\u20132023, regaining relevance as macroeconomic stability improved.<\/p>\n<\/li>\n<li data-start=\"1233\" data-end=\"1503\">\n<p data-start=\"1235\" data-end=\"1503\">The <strong data-start=\"1239\" data-end=\"1290\">crowding-out effect of government bonds (OVDPs)<\/strong> was temporary and counter-cyclical, peaking in early 2022.<br data-start=\"1349\" data-end=\"1352\" \/>Banks reallocated funds to safer assets as demand for loans fell \u2014 but this effect faded by 2023. <strong data-start=\"1452\" data-end=\"1502\">CD rates had only a short-lived, modest impact<\/strong>.<\/p>\n<\/li>\n<li data-start=\"1505\" data-end=\"1792\">\n<p data-start=\"1507\" data-end=\"1555\"><strong data-start=\"1507\" data-end=\"1552\">Lending behavior varies across bank types<\/strong>:<\/p>\n<ul data-start=\"1558\" data-end=\"1792\">\n<li data-start=\"1558\" data-end=\"1621\">\n<p data-start=\"1560\" data-end=\"1621\"><em data-start=\"1560\" data-end=\"1575\">Foreign banks<\/em> are largely insulated from domestic shocks.<\/p>\n<\/li>\n<li data-start=\"1624\" data-end=\"1682\">\n<p data-start=\"1626\" data-end=\"1682\"><em data-start=\"1626\" data-end=\"1651\">Private Ukrainian banks<\/em> are driven by profitability.<\/p>\n<\/li>\n<li data-start=\"1685\" data-end=\"1792\">\n<p data-start=\"1687\" data-end=\"1792\"><em data-start=\"1687\" data-end=\"1706\">State-owned banks<\/em> (USBs) remain risk-averse and prioritize government securities over business lending.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li data-start=\"1794\" data-end=\"2048\">\n<p data-start=\"1796\" data-end=\"2048\"><strong data-start=\"1796\" data-end=\"1828\">Lending recovery is underway<\/strong>, especially for market-based loans. It is supported by lower policy rates and stronger borrower profiles.<br data-start=\"1934\" data-end=\"1937\" \/>Still, <strong data-start=\"1946\" data-end=\"2047\">many viable businesses \u2014 particularly SMEs and those in war-affected regions \u2014 remain underserved<\/strong>.<\/p>\n<\/li>\n<\/ul>\n<hr data-start=\"2050\" data-end=\"2053\" \/>\n<h3 data-start=\"2055\" data-end=\"2081\">Policy Recommendations<\/h3>\n<ol data-start=\"2083\" data-end=\"2787\">\n<li data-start=\"2083\" data-end=\"2215\">\n<p data-start=\"2086\" data-end=\"2215\"><strong data-start=\"2086\" data-end=\"2114\">Reduce war-related risks <\/strong>via government-backed insurance, targeted credit guarantees, and donor-funded de-risking tools.<\/p>\n<\/li>\n<li data-start=\"2217\" data-end=\"2377\">\n<p data-start=\"2220\" data-end=\"2377\"><strong data-start=\"2220\" data-end=\"2254\">Improve enterprise bankability <\/strong>by supporting SME training, encouraging formalization, and expanding access to non-bank finance (e.g. credit unions).<\/p>\n<\/li>\n<li data-start=\"2379\" data-end=\"2551\">\n<p data-start=\"2382\" data-end=\"2551\"><strong data-start=\"2382\" data-end=\"2418\">Mobilize state and foreign banks <\/strong>through directive lending schemes, guarantees, and incentives to shift from government securities to productive business loans.<\/p>\n<\/li>\n<li data-start=\"2553\" data-end=\"2678\">\n<p data-start=\"2556\" data-end=\"2678\"><strong data-start=\"2556\" data-end=\"2588\">Ensure policy predictability <\/strong>\u2014 especially in taxation and military conscription \u2014 to support business confidence.<\/p>\n<\/li>\n<li data-start=\"2680\" data-end=\"2787\">\n<p data-start=\"2683\" data-end=\"2787\"><strong data-start=\"2683\" data-end=\"2728\">Monitor the use of government instruments <\/strong>to avoid unintended distortions in the credit market.<\/p>\n<\/li>\n<\/ol>\n<hr data-start=\"2789\" data-end=\"2792\" \/>\n<h3 data-start=\"2794\" data-end=\"2817\">Strategic Alignment<\/h3>\n<p data-start=\"2819\" data-end=\"3026\">This analysis supports the implementation of the <strong data-start=\"2868\" data-end=\"2915\">National Bank of Ukraine\u2019s Lending Strategy<\/strong> and aligns with <strong data-start=\"2932\" data-end=\"2950\">IMF priorities<\/strong> to expand access to finance and accelerate Ukraine\u2019s <strong data-start=\"3004\" data-end=\"3025\">economic recovery<\/strong>.<\/p>\n<p data-start=\"2819\" data-end=\"3026\"><em>The study was prepared in \u0441ooperation with the German Economic Team.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>\ufeff Since the onset of Russia\u2019s full-scale invasion, Ukraine\u2019s banking system has remained stable, but corporate lending has steadily declined. This trend stems from a combination of: heightened war-related risks, reduced credit demand from businesses, structural barriers on the supply side. While private sector lending is essential for wartime resilience and post-war recovery, access to [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":34796,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[176,197,143],"tags":[576],"experts":[172,513,500,527,478],"news_type":[140],"class_list":["post-34830","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-macroeconomics-en","category-research-list-en","category-home-news-en","tag-monetary-policy-en","experts-maria-repko","experts-volodymyr-landa","experts-yana-ohrimenko","experts-yeleazar-levchenko","experts-mariia-tomilina","news_type-researches"],"acf":[],"_links":{"self":[{"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/posts\/34830","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/comments?post=34830"}],"version-history":[{"count":10,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/posts\/34830\/revisions"}],"predecessor-version":[{"id":36093,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/posts\/34830\/revisions\/36093"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/media\/34796"}],"wp:attachment":[{"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/media?parent=34830"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/categories?post=34830"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/tags?post=34830"},{"taxonomy":"experts","embeddable":true,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/experts?post=34830"},{"taxonomy":"news_type","embeddable":true,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/news_type?post=34830"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}