Journal articles on the topic 'Agricultural Credit Lending'
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1
Nepochatenko, O. O., P. K. Bechko, S. O. Ptashnyk, and V. I. Nagorny. "Development of the bank lending system of agricultural business." Collected Works of Uman National University of Horticulture 2, no. 99 (December 22, 2021): 7–17. http://dx.doi.org/10.31395/2415-8240-2021-99-2-7-17.
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A factor in ensuring reproduction in agriculture is the development of a bank lending system. Currently, the need for credit resources in agriculture requires further development of a specialized system that would meet the requirements and conditions of a modern market economy. Issues of formation and development of the credit system in agriculture are considered both by domestic economic theory and practice and by countries with developed market relations, which are based on the development of the infrastructure of modern credit relations, forms and methods of lending. The sphere of agricultural lending is in the process of formation due to imperfect legislative provision, underdevelopment of the credit products market, and the absence of the vast majority of market infrastructure entities. Solving these problems will help expand the availability of agricultural producers to credit resources, as well as ensure the stabilization and development of the industry. Agricultural production is a strategically important sector of the national economy, the development of which depends on the level of food and national security of the country. The development of the modern agricultural sector as the most important component of the national economy largely depends on external sources of financing, the main of which is bank lending. State support for lending to farmers is an objective necessity. At the same time, limited access of farmers to credit resources of banks makes it impossible to increase production efficiency. Increasing the availability of farmers to credit resources is one of the priority areas for ensuring the dynamic development of agriculture, their functioning on self-financing and self-sufficiency. A well-established lending system plays an important role in lending to agricultural producers. Studies on the development of the bank lending system for agricultural producers indicate the lack of a developed legal framework for providing farmers with bank loans for both operating and investment activities. Preferential lending regime introduced in the practice of lending to farmers in modern conditions does not work due to lack of budget funds.
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Ahrendsen, Bruce L., Bruce L. Dixon, and LaDerrek T. Lee. "Independent Commercial Bank Mergers and Agricultural Lending Concentration." Journal of Agricultural and Applied Economics 31, no. 2 (August 1999): 215–27. http://dx.doi.org/10.1017/s1074070800008506.
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AbstractIn an era of rapid consolidation in banking, the effect of mergers on the availability of credit to agricultural businesses is unclear. Commercial bank mergers have profoundly altered the urban credit marketplace and are positioned to do the same for the agricultural credit marketplace. Adjustment models are estimated with data on independent bank consolidations from 1988 through 1995. The regression results bode well for agricultural lending if acquiring banks have larger concentrations of assets in agriculture than acquired banks. Conversely, if acquiring banks have smaller concentrations than acquired banks, acquisitions have a negative impact on agricultural lending. Since most acquiring banks have smaller agricultural loan concentrations than acquired banks, there is concern for agricultural lending. However, other lenders are likely to fill credit gaps that develop.
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HRYSHCHUK, Nadiia. "The role of credit resources in financial support of agricultural manufacturers in modern economic conditions." Economics. Finances. Law 12/2, no. - (December 24, 2021): 14–19. http://dx.doi.org/10.37634/efp.2021.12(2).3.
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The paper examines the relevance of lending to the agricultural sector as an external source of financing for agricultural producers. Using the analysis of commercial banks, the role of bank lending as an important source of financial support for the functioning of agricultural enterprises is revealed. The analysis of the loan portfolio of agricultural enterprises is carried out with the definition of the dominant feature – the Program of reduction of credit resources due to the introduction of new credit programs. It is outlined that the access of agricultural enterprises to credit resources gives them the opportunity to master the innovative technologies needed to ensure the appropriate level of their competitiveness. The actual offers of credit products for financing the development of agriculture in Ukraine through the tools of preferential lending, specialized banking programs are described. Emphasis is placed on the problems that hinder the development of the agricultural sector, the state of lending to agricultural producers, the regulation of lending to agricultural enterprises. The current state of loans by banking institutions to the agro-industrial complex, stimulation of its development by the state are analyzed and researched, special emphasis is placed on modern programs of credit products, their positioning in line with traditional forms of credit. It is substantiated and proved that credit support for the functioning of agricultural producers in the modern economic environment is aimed at developing a system of interaction with the agricultural sector of the economy, which is an important factor in economic growth, improving the economic situation in a competitive environment. Suggestions and recommendations for more effective financing of the agricultural sector of Ukraine in modern economic conditions are provided.
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Katchova, Ani L., and Peter J. Barry. "Credit Risk Models and Agricultural Lending." American Journal of Agricultural Economics 87, no. 1 (February 2005): 194–205. http://dx.doi.org/10.1111/j.0002-9092.2005.00711.x.
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Tomashuk, Iryna. "Теоретичні аспекти сутності банківського кредиту та особливості кредитних відносин в аграрному секторі економіки." Ekonomika APK 319, no. 5 (May 28, 2021): 101–12. http://dx.doi.org/10.32317/2221-1055.202105101.
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The purpose of the article is to study and comprehend the essence of credit as a basic economic category and identify the features of bank lending in the agricultural sector of the economy. Research methods. In the process of research a number of methods were used: abstract-logical - for structuring and theoretical substantiation of the essence of the categorical apparatus of credit and credit relations; methods of comparative analysis and synthesis - to study the evolutionary aspects of credit development and credit relations in society; monographic - in identifying and systematizing the characteristics of credit relations in the agricultural sector of the economy; structural and functional approach for the formation of a conceptual vision of credit as an economic category and providing the specifics of the system of bank lending to agricultural enterprises; graphic - to illustrate and systematize the results of the study. Research results. The ambiguity of the interpretation of the credit category in the modern economic literature is revealed. It is proposed to consider the loan as a system of organizational and economic relations between the lender and the borrower, legally enshrined in the loan agreement, on the provision of funds for temporary use on terms of payment, maturity, intended use, security and return. The dualistic nature of credit efficiency is identified and analyzed. The fundamental nature of the impact of the specifics of agriculture on credit relations in the agricultural sector of the economy is assessed. The legitimacy of the existence of a separate mechanism of credit relations in the agar sector of economies is proved. The essential characteristics and features of agricultural credit are systematized and the priority features of objects of crediting in agriculture are covered. Scientific novelty. Theoretical aspects of structuring the interpretation of the essence of credit and credit relations have been further developed. Substantiation of structural components and features of bank lending of the agar sector of the economy. Practical significance. The results of the study can be used by public and sectoral authorities, as well as banking institutions in developing measures to enhance lending to the agricultural sector of the economy. Tabl.: 1. Figs.: 3. Refs.: 31.
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Tomashuk, Inna, and Iryna Tomashuk. "THEORETICAL AND ORGANIZATIONAL ASPECTS OF THE MECHANISM OF LENDING TO AGRICULTURAL ENTERPRISES." Economic discourse, no. 3-4 (December 30, 2021): 64–78. http://dx.doi.org/10.36742/2410-0919-2021-2-7.
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Introduction. Bank lending to farmers remain one of the most important issues that need in-depth research and improvement, as the problem of lack of working capital and relatively low efficiency of production and economic activities of agricultural enterprises is only exacerbated. An effective system of bank lending is able to solve this problem. Methods. In the process of research a number of methods were used: abstract and logical - to determine the essence of the concept, structure and elemental composition of the credit mechanism of agriculture; methods of comparative analysis and synthesis - for study modern aspects of the organization of bank lending to agricultural enterprises; monographic - for identifying and systematizing specific features of the organization of the credit process in the agricultural sector of the economy; structural-functional approach – to form a conceptual vision of the credit mechanism of the agro-industrial complex and its institutional support; graphic - to illustrate and systematize the results of the study; method of analysis of hierarchies - to substantiate the criterion hierarchical system of choice by the borrower of a banking institution. Results. Theoretical views on the essence, structure and elemental composition of the credit mechanism of agro-industrial complex are systematized. The author's vision of the essence of the credit mechanism of agro-industrial complex is formulated, the structuring of its priority elemental components is offered. The algorithm of relations and interactions between the lender and the borrower as subjects of crediting is systematized. The specifics of the bank's credit policy in relation to agricultural enterprises are identified and the range of credit products for financing their working capital and investment is analysed. The directions of increase of efficiency of cooperation of banks with agrarians in the field of crediting are offered. Discussion. The obtained results of the research can be used by the bodies of branch management of the agrarian sector of the economy, as well as by banking institutions in the development of measures and directions for optimization and improvement of lending to agricultural enterprises. Prospects for further research are systematization and refinement of methodological aspects of assessing the impact of bank lending on agricultural security of the state, as well as testing methods of economic and mathematical modelling to assess the impact of bank lending to agricultural enterprises on the gross product of the agricultural sector and GDP. Keywords: credit mechanism; credit process; credit relations; bank credit; risk; creditor; the borrower; credit product; state support.
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Kovalenko, V., S. Sheludko, O. Sergeeva, T. Kyriazova, and O. Yesina. "CREDIT SUPPORT FOR AGRICULTURAL DEVELOPMENT: COMPARATIVE CHARACTERISTICS OF UKRAINE AND KAZAKHSTAN." BULLETIN 3, no. 391 (June 12, 2021): 72–80. http://dx.doi.org/10.32014/2021.2518-1467.101.
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The paper examines the current features of bank lending to agricultural enterprises in Ukraine and Kazakhstan. It is proved that the agricultural entrepreneurship of the compared countries’ economies increasingly needs the financial investments, necessary for the renewal and technological modernization of production. The purpose of the paper is to analyze the state of lending to agricultural enterprises in Ukraine and Kazakhstan, study its volume, identify the main directions of changes in its structure by type of credit services, as well as assess trends and prospects for its development. Section 1 of the article identifies the features of banks’ credit policy concerning lending to agricultural enterprises. It is presented the methodological approach to the comparative assessment of the development of the agro-industrial complex of Ukraine and Kazakhstan. It is identified the main provisions of strategies for the development of agricultural production in Ukraine and Kazakhstan. It is substantiated features of banks’ credit policy in lending to agricultural enterprises, which restrain the active growth of lending to the agro-industrial complex. Section 2 of the article provides a comparative description of Ukraine and Kazakhstan in terms of credit support to the industry. It is established that the most attractive for bank lending are large agricultural enterprises in terms of production and yield. It is proved the importance of direct state financial support for economic entities of the agro-industrial complex through the mechanisms of cheaper loans and compensation of lease payments. In the final section, the authors highlight the key priorities of accelerating the development of bank lending to agricultural enterprises in Ukraine and Kazakhstan by increasing budget support, rational use of budget funds, lower interest rates for agriculture, improving methods of assessing the creditworthiness of borrowers with concern of specific production.
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HERBYCH, Liudmyla, and Larysa NETREBCHUK. "CREDIT WORTHINESS OF AGRICULTURAL ENTERPRISES." Herald of Kyiv National University of Trade and Economics 133, no. 5 (October 20, 2020): 88–101. http://dx.doi.org/10.31617/visnik.knute.2020(133)08.
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Background. Agriculture is a source of increased credit risk for banks and other lenders, which requires special approaches to assessing the credit worthiness of the enterprises in this industry. The assessment improving of the credit worthiness of the agricultural enterprises is one of the key scientific and practical problems. The aim of the article is to identify and systematize the factors influencing the level of credit worthiness of the agricultural enterprises. Materials and methods. The theoretical basis of the research is a systematic approach that has been used to identify and analyze the factors of credit worthiness of the agricultural enterprises. The methodological basis consisted of system-structural, comparative analysis and logical generalization methods. The information basis of the research is analytical materials, scientific researches, results of own researches. Results. The purpose of assessing the credit worthiness of the agricultural enterprise is to obtain a quantitative and qualitative assessment of the borrower’s activities by a creditor. Based on this, creditor assesses the risk of lending and decides about the possibility and conditions of lending or refusal to the borrower. Existing methods of assessing the credit worthiness of the agricultural enterprises do not often take into account the peculiarities of their activities, which directly affect the ability of these enterprises to repay the loan. During the assessing the credit worthiness of the agricultural enterprise, it is appropriate to take into account financial indicators that characterize its financial position and non-financial factors that describe the actual and potential conditions of its management. Based on the results of systematization of existing approaches and own conclusions, it is proposed to classify the factors influencing the credit worthiness of the agricultural enterprises by the source of influence on the company, the possibility of influence by the company, the method of measurement, nature. Conclusion. The article presents the author’s vision of the classification factors influencing the agricultural enterprises ability to obtain credit and expand their list by addition them with factors of soil quality and organic production, which will reduce the credit risk of financial institutions in lending.
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Kaur Brar, Jagdeep, Antoine Kornprobst, Willard John Braun, Matthew Davison, and Warren Hare. "A Case Study of the Impact of Climate Change on Agricultural Loan Credit Risk." Mathematics 9, no. 23 (November 28, 2021): 3058. http://dx.doi.org/10.3390/math9233058.
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Changing weather patterns may impose increased risk to the creditworthiness of financial institutions in the agriculture sector. To reduce the credit risk caused by climate change, financial institutions need to update their agricultural lending portfolios to consider climate change scenarios. In this paper we introduce a framework to compute the optimal agricultural lending portfolio under different increased temperature scenarios. In this way we quantify the impact of increased temperature, taken as a measure of climate change, on credit risk. We provide a detailed case study of how our approach applies to the problem of optimizing a portfolio of agricultural loans made to corn farmers across different corn producing regions of Ontario, Canada, under various climate change scenarios. We conclude that the lending portfolio obtained by taking into account the climate change is less risky than the lending portfolio neglecting climate change.
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Sakhno, Andrii, Natalia Polishchuk, Iryna Salkova, and Anatolii Kucher. "Impact of Credit and Investment Resources on the Productivity of Agricultural Sector." European Journal of Sustainable Development 8, no. 2 (June 1, 2019): 335. http://dx.doi.org/10.14207/ejsd.2019.v8n2p335.
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The current state of financial provision of agriculture in Ukraine is generally unsatisfactory; therefore, the problem of financing the agrarian sector of the economy in the form of lending and investing appears. The purpose of the article is to assess the impact of external financial support of enterprises in the form of lending and investing on agricultural productivity, as well as an assessment of the risk of overdue loans in the regional section of the agrarian sector of the Ukrainian economy. It is investigated the dependence of income (proceeds) on sales of products, proceeding from the needs of agricultural lending in ensuring the efficiency of its economic activity. Thus, lending and investing in agriculture contributes to increasing sales volumes and revenue (sales) growth from sales, as well as stimulating the development of agrarian enterprises, but the correlation between the analyzed indicators is insignificant. The evaluation results indicate a significant risk of overdue loans to agrarian enterprises for all regions of Ukraine, due to low technical efficiency and high level of delinquency. Significant differentiation of regions according to the level of technical efficiency has been revealed, which may indicate significant reserves of its increase. At the same time, it was found that the interest rates on agricultural loans are not a decisive factor for delays in loans granted to enterprises. In order to improve the situation, it is necessary to increase the volume of external financing and the link density between the parameters: lending – investment – the growth of production and sales, which will allow the formation of a functioning environment, taking into account the possibilities of optimizing costs in each region of the state. Key words: risks, lending, investment, agriculture, risk assessment, agrarian enterprises.
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Sus, Lesia. "MODERN FEATURES OF BANK CREDIT SUPPORT TO AGRICULTURAL ENTERPRISES IN UKRAINE." sj-economics scientific journal 44, no. 1 (March 30, 2022): 4–16. http://dx.doi.org/10.58246/sjeconomics.v44i1.266.
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The agricultural sector occupies a significant share in the Ukrainian economy, which is why the author analyzes the role of the bank credit market in providing agricultural enterprises with financial resources. Relying on theoretical and methodological research, two groups of factors have been singled out that generate the specifics of lending to farmers. The current state of capital investment financing through bank lending is presented. Interest rates on bank loans and volumes of lending to agricultural enterprises are considered. The rating of the largest creditors of the agricultural sector of Ukraine is formed. The dependence of gross value added on the volume of agricultural lending has been studied. The state regulation of specialized banks in order to create the most favorable conditions for lending to agricultural enterprises is substantiated.
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Chernenko, Olha, and Iryna Vdovenko. "Condition and problems of entrepreneurial subjects lending." EUREKA: Social and Humanities, no. 2 (April 5, 2021): 3–10. http://dx.doi.org/10.21303/2504-5571.2021.001731.
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Lending is a main instrument of bank institutions’ influence on the development of economy and its subjects. The aim of the paper is to analyze the condition of entrepreneurial subjects lending by the bank system, especially agrarian enterprises, and separation of main restraining factors of its development. During 2017-2020 there is observed an essential reduction of volumes of medium-term and long-term credits, given to entrepreneurial subjects. The use of short-term credits for less than 1 year, the most specific weight (80.5 %) of which is possessed by microentrepreneurial subjects with annual income less than 50 thousand euro, prevails. It has been established, that high cost of credit resources, absence of correspondent guarantee and insufficient competitiveness of most entrepreneurial subjects prevent the development of credit relations for all participants (borrowers, creditors and state).
Agricultural economy that produces more than 12 % of GDP and provides more than 40 % of Ukrainian currency receipts, demonstrates positive financial results of activity, is really underfinanced at the expanse of bank credits. A share of credits, directed to the agrarian sector during last years, is essentially less than the contribution of the branch in the gross added value formation in the country. A bank credit policy, acceptable for all entrepreneurial subjects and directed on credit cost decrease and long-term lending increase, is necessary. Studies of the influence of arrangements in the AIC by reduction of credit prices on effective indices (pure profit of agrarian enterprises) has testified a close connection (R=0,9803), comparing with other factors, that is why the practice of using the preferential lending mechanism must be continued, but by stable, not continuously changing approaches and by direct state support of just small and medium entrepreneurial subjects, which are most limited in access to credit resources of bank institutions.
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E. Brewer, Brady, Christine A. Wilson, Allen M. Featherstone, and Michael R. Langemeier. "Multiple vs single lending relationships in the agricultural sector." Agricultural Finance Review 74, no. 1 (April 29, 2014): 55–68. http://dx.doi.org/10.1108/afr-04-2013-0014.
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Purpose – The purpose of this paper is to examine the use of single vs multiple lenders by Kansas farms. Previous studies suggest that as the risk level of the firm changes, borrowers desire to enhance the probability of obtaining credit at the lowest possible cost may cause them to use multiple lenders. Design/methodology/approach – A model is adopted from the banking literature to describe farm behavior in obtaining credit from a single vs multiple lenders. Using farm-level data from the Kansas Farm Management Association, an empirical model analyzes how farm characteristics affect the number of lending relationships. A model is developed to analyze the number of lending relationships effect on the profitability of the farm. Findings – It is found that highly leveraged farms seek additional lending relationships supporting the theoretical model and that additional lending relationships correlate to a decrease in profitability. Roughly, 50 percent of Kansas farmers that borrow use a single lender. Roughly 48 percent use from two to four lenders, with the remaining 2 percent using more than four lenders. Originality/value – Provides empirical results to support developed theoretical framework on the number of lending institutions. This study helps understand factors correlated to a farmer's decision to use multiple lenders. Analyzing the number of lending relationships helps understand how farmers manage their debt to maintain access to credit when needed at the lowest possible cost.
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Lemishko, Оlena, and Natalie Shevchenko. "Lending in the agricultural sector of Ukraine: challenges and solutions." Economic Annals-ХХI 192, no. 7-8(2) (September 21, 2021): 74–87. http://dx.doi.org/10.21003/ea.v192-07.
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The promotion of efficient development of productive resources, specific geographic areas, and branches of the economy is the fundamental reference point of the financial and credit policy of the state. In particular, the agricultural sector has certain features of capital formation within the financial system of the state. This is reflected in the requirements and approaches to the development of financial policy by the state and in the corresponding mechanism for its implementation. Being an important tool within this mechanism, lending is aimed at ensuring the economic growth of the agricultural sector. State support facilitated the system of subsidizing loans by providing funds to reduce the cost of loans for farmers in Ukraine, thus encouraging increased productivity in the agricultural sector at the initial stage. However, gradually, this caused a debt agricultural economy that became dependent on the state and started negatively affecting the elimination of structural, intersectoral, and territorial disparities in the agricultural sector. Therefore, the article is relevant, with mentioned issues requiring immediate examination of state credit support to the agricultural sector as well as justification of financial and credit policy of the state with the view of mutually beneficial cooperation between banking institutions and Ukraine’s agricultural sector for stable and efficient development of the latter. The article analyzes the market of bank lending to agricultural enterprises. It also reveals the influence of bank lending on the development of the agricultural sector in Ukraine. The study identifies subjective factors considered as biggest сhallenges for lending to the agricultural sector in Ukraine. The core problems of lending to the agricultural sector in Ukraine are identified in our study, namely: increasing inflation risks; ineffectiveness of economic promotion programs, tightening of the NBU’s monetary policy, underdevelopment of the non-banking financial market, unfavorable conditions in the foreign financial markets. Measures are suggested to solve the problems of lending to the agricultural sector, the essence of which comes down to the development of partnership mechanisms between the state, agricultural enterprises, and banking institutions. А unified regulatory and methodological framework for lending secured by agricultural land should be established. The paper covers European land mortgage lending practices. In Ukraine, they might be adopted by directly raising public funds not only through an authorized state credit institution but also through private credit institutions operating in a market environment.
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Desai, Rajesh. "Impact of Priority Sector Lending on Financial Profitability: Segment Wise Panel Data Analysis of Indian Banks." Management and Accounting Review 20, no. 1 (April 30, 2021): 19–37. http://dx.doi.org/10.24191/mar.v20i01-02.
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A sustainable and financially stable banking system is a prerequisite to achieve comprehensive growth as well as economic and social well-being of residents of any country. This research focused on analyzing profitability of Indian banks and how it is affected by lending in the priority sector. Priority sector lending (PSL) mainly includes deployment of credit to weaker and neglected segments of an economy. The study adopted a distinctive measure to represent total PSL by classifying it into four sub-segments i.e., agriculture, industrial, service, and personal credit. Applying panel least square regression with fixed and random effects model, the study concluded that agricultural lending has a significant negative impact on bank profitability whereas the service sector lending adds positive value towards financial profitability of banks. Industrial and personal credit were found to be insignificant factors affecting profitability. The study will be beneficial to banking professionals and policy makers to determine sensitive and risky sectors of lending and develop appropriate approaches to deal with them.
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Hartarska, Valentina, Denis Nadolnyak, and Xuan Shen. "Agricultural credit and economic growth in rural areas." Agricultural Finance Review 75, no. 3 (September 7, 2015): 302–12. http://dx.doi.org/10.1108/afr-04-2015-0018.
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Purpose – In this paper, the authors set out to establish if there is a link between finance and economic growth in rural areas. The purpose of this paper is to evaluate the relation between credit by major lenders in rural areas – commercial banks and Farm Credit System (FCS) institutions – and economic growth for the period 1991-2010. Design/methodology/approach – The motivation for this work comes from empirical studies showing a link between economic development and financial system development as well as from work which highlights the positive role of long-term finance provided by banks. The authors use two alternative panel data sets and fixed effects models to estimate the causal effect of credit supply (with lagged explanatory variables) on agricultural GDP growth per rural resident. Findings – The authors find a positive association between agricultural lending and agricultural GDP growth per rural resident with additional billion in loans (about a third of the actual average) associated with 7-10 percent higher state growth rate with this association stronger during the 1990s. Regional data confirm these results. The results point to a positive link between credit and economic growth in rural areas during that period, attributable to the lending by FCS institutions and by commercial banks. Research limitations/implications – Data availability limits the scope of this paper. The authors use state level balance sheet data available for the 1991-2003 period and annual data for 2003-2010 period. An additional regional data set is constructed for 1991-2010 with more aggregated data for the ten USDA agricultural production regions. The small number of panels limits the ability to use more sophisticated econometric models and the choice of dependent variables that captures economic growth. Practical implications – By provides evidence that agricultural finance and in particular lending contribute significantly to the growth of US agriculture, this paper contributes to the policy debate on weather support for agricultural finance initiatives is justified. Originality/value – The authors are not aware of another study that has linked agricultural lending by commercial banks and FCS institutions to growth in rural areas in the USA.
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Putra, Hari Setia, Yunnise Putri, Ali Anis, and Zul Azhar. "Contribution of conventional bank lending for agricultural sector in Indonesia." Jurnal Perspektif Pembiayaan dan Pembangunan Daerah 9, no. 4 (October 31, 2021): 331–42. http://dx.doi.org/10.22437/ppd.v9i4.13095.
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This study examines the determinant contribution of conventional bank lending for the agricultural sector in Indonesia. The analysis method used in this research is the Vector Correction Model (VECM). The results showed that in the short term, there was no significant effect of the Non-Performing Loan (LogNPL), GDP of Agricultural Sector (LogPDB), and Agricultural Sector Credit Interest Rates (SBK). However, there is an effect of the LogNPL and LogPDB on the conventional bank lending for the agricultural sector in the long term. The LogNPL has a significant positive effect on the contribution of conventional bank lending to the agricultural sector. While the LogPDB has a significant negative effect on the contribution of conventional bank lending for the agricultural sector. The Impulse Response Function (IRF) analysis results show that shocks to the LogNPL respond negatively in the long run, shocks to the LogPDB respond positively in the long run, and shocks to the SBK respond negatively in the long run by conventional bank lending for the agricultural sector. Through the analysis of FEVD (Forecast Error Variance Decomposition), it is known that the biggest contribution to conventional bank lending for the agricultural sector is agricultural credit and GDP.
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Arzhevitin, S., B. Stetsenko, I. Okhrymenko, A. Bilochenko, and V. Biloshapka. "MODERN PROBLEMS OF BANK LENDING OF ENTERPRISES OF THE AGRICULTURAL COMPLEX OF UKRAINE." Financial and credit activity problems of theory and practice 4, no. 39 (September 10, 2021): 50–57. http://dx.doi.org/10.18371/fcaptp.v4i39.238596.
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Abstract. The purpose of the article is to identify the main factors that constrain lending to enterprises of the agro-industrial complex of Ukraine, to suggest ways to improve their lending system. A systematic approach was chosen as the methodological basis of the study, which provides for a comprehensive study of the bank lending system of the agro-industrial complex. Historical and structural-functional approaches were also used in its analysis. Methods of comparative analysis were used to consider some problems of bank lending to the agro-industrial complex. Of the general scientific methods in this study, methods of analysis and synthesis, induction and deduction were used. The article examines the dynamics and structure of loans to the agro-industrial complex in Ukraine for 2015—2020; the dynamics of interest rates on loans to the agro-industrial complex and the dynamics of agricultural production by UAH 1. credit provision of the agro-industrial complex in Ukraine for 2015—2020. During the analyzed period, these indicators increase or decrease proportionally, as evidenced by the importance of the efficiency of credit support of the agar sector. In 2020, the efficiency of credit provision of the agricultural sector amounted to UAH 11.64, which is UAH 0.4 more than in 2015. The analysis revealed that the agro-industrial complex today has a high need for financial resources. The characteristic of the main problems of the mechanism of crediting of an agro-industrial complex is given. The need to ensure the availability of bank loans has been identified. Stimulating investment lending to agricultural enterprises will have a positive impact on the development of the industry, as well as improve the existing economic situation of rural residents. High demand for credit resources from agricultural producers, the current state and dynamics of lending to the agro-industrial complex in Ukraine allow us to conclude that it is necessary to improve the mechanism of bank loans, develop effective credit products for the agro-industrial complex and strengthen state support for agricultural lending. Keywords: credit, banks, enterprises of the agro-industrial complex, credit programs for the agro-industrial complex. JEL Classification G21, Q14 Formulas: 0; fig.: 3; tabl.: 1; bibl.: 15.
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Zegarra, Luis Felipe. "Information asymmetries and agricultural credit." Agricultural Finance Review 79, no. 2 (April 1, 2019): 217–33. http://dx.doi.org/10.1108/afr-08-2018-0062.
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Purpose The purpose of this paper is to analyze the functioning of the rural credit market of Lima from 1825 to 1865, paying special attention to the effect of information asymmetries on the access to rural credit. Design/methodology/approach The article relies on primary sources for the study of the early credit market of Lima. In particular, the study relies on a sample of notarized loans for 1825–1865 and on property tax reports, collected from the National Archives of Peru, to determine the effect of information asymmetries, collateral and regional lending on access to credit. The article also analyzes the legal system of Peru during this period to determine whether property rights were well protected and so collateral could be used in the rural credit market. Findings A revision of the legislation shows that the legal system had some deficiencies, but allowed landlords and tenants to use their assets as collateral. Tax reports show that landlords and tenants owned valuable capital that could be used as collateral. Evidence from notarized loans shows that information asymmetries severely restricted inter-regional lending. In Lima, however, notaries played a role as financial intermediaries, providing the information about potential borrowers and allowing landlords and tenants to access credit. As a result, access to credit was significant for landlords and tenants. Originality/value This paper is one of the few historical studies on the role of information asymmetries in the allocation of rural credit in Latin America. It contributes to our understanding of credit markets prior to the creation of banks.
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Zech, Lyubov, and Glenn Pederson. "Application of credit risk models to agricultural lending." Agricultural Finance Review 64, no. 2 (November 2004): 91–106. http://dx.doi.org/10.1108/00214660480001156.
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Savitha, Basri, and Naveen Kumar K. "Non-performance of financial contracts in agricultural lending." Agricultural Finance Review 76, no. 3 (September 5, 2016): 362–77. http://dx.doi.org/10.1108/afr-01-2016-0001.
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Purpose Evaluating a portfolio of agricultural loans has become an important issue in recent years primarily due to a large number of loan defaults. The purpose of this paper is to investigate the factors influencing credit repayment behavior of farmers in Karnataka. Design/methodology/approach The study is based on secondary data of 590 farmers collected from a private bank in the state of Karnataka, India. Binary logistic regression and multinomial regression analysis was carried out to estimate the probability of non-payment of a loan. Findings The results of the regression confirm a significant relationship between non-repayment of agricultural credit and characteristics of borrowers such as the age, years of banking relationship, yield of the crop, distance to bank branch, size and tenure of the loan, farm size and leverage and efficiency ratio. Practical implications The factors predicted by the model do certainly help in improving the decision-making process in agricultural lending. A rigorous assessment of family responsibilities, farm size, credit-to-asset ratio, interest burden on the farmers and farm income is suggested to reduce the probability of doubtful assets. Originality/value The studies that predict default risk in agricultural loan are limited in India. This is one of the few studies that estimate the determinants of substandard and doubtful categories of credit in a private sector bank.
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A. B, Odinwa, Johnny B, Ekeogu C.O, and Chukuigwe O. "Challenges of Accessing Agricultural Credits by Farmers for Increased Food Production in Delta State, Nigeria." INTERNATIONAL JOURNAL OF AGRICULTURE AND EARTH SCIENCE 8, no. 2 (July 2, 2022): 10–21. http://dx.doi.org/10.56201/ijaes.v8.no2.2022.pg10.21.
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The study investigated the challenges of accessing agricultural credits by farmers for increased food production in Delta State, Nigeria, the specific objectives were to: examine the level of awareness of the sources of agricultural credits to farmers in the study area, ascertain the extent of accessibility of such agricultural credits to farmers, and identify the challenges facing farmers in accessing agricultural credits in Delta State. Descriptive survey design was adopted to assess the farmers. Purposive sampling technique was used to select three LGAs and a total of nine (9) communities while 32 respondents from each of the 9 communities were randomly selected given a total of two hundred and eighty-eight (288) respondents and used for the study. Weighted mean scores derived from the Likert type rating scale was used to analyze the data collated for the study, while the Analysis of Variance (ANOVA) was engaged for test of significance at 0.05% level of significance. The findings showed that the farmers were highly aware of Personal savings (GM = 2.49), Cooperative societies (GM = 2.47), Government bodies (GM = 2.28), Micro Finance bank (GM = 2.28) and Commercial Agriculture Credit Scheme (GM = 2.18) among others as sources of agricultural credits in Delta State. It indicated that Personal savings, Loan from Cooperative societies, Bank of Agriculture (BOA), Micro Finance Bank and the Commercial Agriculture Credit Scheme among other formal and informal sources of agricultural credits were highly accessible to farmers in the area. Finally, it showed in the degree of seriousness that: Lack of trust by the lending institutions (GM = 3.32), Poor leadership vision in agriculture (GM = 3.25), Lack of awareness of available agro credits (GM = 3.22), Low perception of farming enterprise by the people (GM = 3.20), High interest rate (GM = 3.05), Not having the required savings with the lending institution (GM = 3.02), beside others were the most serious challenges confronting farmers in accessing agricultural credits in Delta State. All the test results (ANOVA) showed no significant difference among the three LGAs at P > 0.05 significant level. The study therefore, recommended that: Extension Services should be beefed up in the State to cover the gaps of unawareness of agro credit sources and teach farmers how to access them, Extension agents should be encouraged to supervise and recoup government agricultural loans from farmers to facilitate the flow of agricultural credits in the State, State Government should show concern and make policies that would relax the collateral security to enable the poor farmers access to credits as at when due, and A drastic measure should be put in place by government to punish defaulters who bridge the revolving loans from circulation in the State.
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Shkuratov, Oleksii. "THE ROLE OF LAND-MORTGAGE LOANING IN THE INFRASTRUCTURE SUPPORT OF THE AGRICULTURAL LAND MARKET." Economic discourse, no. 2 (June 2020): 46–53. http://dx.doi.org/10.36742/2410-0919-2020-2-5.
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Introduction. The functioning of the agricultural land market under the existing institutional restrictions hinders the development of one of the most common mechanisms for investment support of the agricultural sector of the economy, namely land mortgage lending. However, the lifting of the moratorium on the sale of agricultural land should serve as an impetus for the development of land mortgage lending, as a tool for transforming land resources into financial assets. Methods. The study is formed based on the use of calculation and constructive, experimental, abstract and logical methods, data from the legislative and statistical base, as well as the study of scientific approaches to the development of land mortgage lending in agriculture. Results. The world experience in land mortgage lending is analyzed, which is based on two main models of its functioning system: single-level (mortgage provider ↔ land mortgage bank) and two-level (mortgage provider ↔ bank ↔ land mortgage agency). The role of land mortgage lending in infrastructure support of the agricultural land market is substantiated. The mechanism of interaction of land, financial and credit and stock markets in the system of land mortgage lending for agriculture. The toolkit for refinancing and securitization of mortgage assets in the land-mortgage lending system of agriculture is substantiated. Discussion. Implementation of recommendations on refinancing and securitization of mortgage pools in the securities markets, as components of the financial subsystem of the agricultural land market infrastructure, will ensure the accelerated development of land mortgage lending in Ukraine’s agriculture. Keywords: mortgage, land mortgage lending, agricultural land, market, infrastructure.
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Trusova, Nataliya, and Nataliia Radchenko. "Tools of Financial Support for Agriculture Lending in Ukraine." Accounting and Finance, no. 4(90) (2020): 59–67. http://dx.doi.org/10.33146/2307-9878-2020-4(90)-59-67.
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In the course of their activities, almost every business entity faces the problem of lack of own funds. This problem is especially acute in the agricultural sector. The constraining factor in the development of bank lending to agricultural enterprises, as always, is the high cost of credit resources and significant collateral requirements, which are often not enough to cover the credit obligations of borrowers. The purpose of the article is to analyze the current state of lending to agricultural enterprises in Ukraine and to substantiate the modern instruments of financial support of crediting of agrarian sphere. The authors conducted a comparative analysis of the efficiency of agricultural enterprises, depending on their size; the structure of financial resources is analyzed and the dependence on external sources of financing is proved; an assessment of the dynamics of the volume of credit investments in the agricultural sector. Study results show that the price factor has a negative impact on the formation of credit relations of agricultural enterprises with banking institutions. According to the authors, the promising instruments of financial support for lending to agricultural enterprises include programs of cooperation with international financial organizations, including the European Investment Bank and the German-Ukrainian Fund. It was established that in Ukraine agricultural enterprises are given ample opportunities to attract credit resources. In order to intensify the lending process, it is important to continue the process of improving the mechanism of forming the value of credit resources and to start work on solving the problematic issues of securing credit obligations by agricultural enterprises. On the other hand, agricultural enterprises must work to increase their own investment attractiveness – to form a positive image; to maintain the financial stability of enterprises at the appropriate level; to develop the organizational and financial culture of the enterprise; increase production efficiency; to improve methodological approaches to drawing up business plans taking into account the requirements of international financial organizations, etc.
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Urazova, Svetlana. "Sustainable banking and possibilities of its application in case of agricultural credit support: world experience and prospects for the Russian Federation." E3S Web of Conferences 175 (2020): 13026. http://dx.doi.org/10.1051/e3sconf/202017513026.
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The article describes the features of bank lending to agriculture, taking into account the focus on achieving sustainable development goals, based on world experience synthesis in the application of sustainable banking, including agricultural lending, recommendations were developed aimed at developing bank lending to agriculture in the Russian Federation based on the ideas of sustainable banking.
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Chanda, Areendam. "Evaluating the Kisan Credit Card Scheme: Some Results for Bihar and India." Arthaniti: Journal of Economic Theory and Practice 19, no. 1 (October 30, 2019): 68–107. http://dx.doi.org/10.1177/0976747919872353.
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The Kisan Credit Card (KCC) scheme was introduced in India in 1998–1999 and has since become a flagship programme providing access to short-term credit in the agricultural sector. According to the Government of India, over a 100 million cards had been issued cumulatively by March 2011. Using data from 2005–2006 to 2009–2010, the article critically examines the determinants of KCC lending across states in India and districts in Bihar. We also examine the effects of the scheme on agricultural growth and yields. Our results suggest that states with initially better access to agricultural credit show subsequently greater amounts of KCC lending. However, Bihar and other BIMARU states also show faster adoption rates that cannot be explained by their recent growth accelerations. Within Bihar, we see that districts with initially greater lending in KCC continue to pull further away from other districts, while in terms of account holders there is evidence of convergence. Finally, we do not see any evidence of KCC lending on state- or district-level agricultural productivity. JEL: Q14, Q0, O41, O47
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Hubbs, Todd, and Todd Kuethe. "A disequilibrium evaluation of public intervention in agricultural credit markets." Agricultural Finance Review 77, no. 1 (May 2, 2017): 37–49. http://dx.doi.org/10.1108/afr-04-2016-0032.
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Purpose Agricultural producers rely on debt capital to support many functions of their enterprise, yet private credit markets are frequently characterized by an imbalance between supply and demand. As a result, a number of public lending programs exist to mitigate the perceived market failures of private credit markets that serve agricultural producers. The paper aims to discuss these issues. Design/methodology/approach This study uses a structural disequilibrium model to examine the potential for excess demand or supply in the private market for non-real estate farm loans between 1978 and 2014. Findings The model demonstrates that the market is frequently characterized by disequilibrium, fluctuating between periods of excess demand and excess supply. These disequilibrium periods motivate the discussion of public intervention as a policy proposal within the agricultural sector. Originality/value This study uses traditional disequilibrium modeling to evaluate the private credit market for agriculture lending in a manner that has not been attempted previously in the literature. The model uses maximum likelihood methods with non-linear solution algorithms to investigate excess supply and demand in the sector.
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Hladii, Mykhailo, and Yurii Luzan. "Lending in the system of agrarian transformations of Ukraine." Ekonomika APK 310, no. 8 (August 28, 2020): 31–44. http://dx.doi.org/10.32317/2221-1055.202008031.
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The purpose of the article is to substantiate the need for further development of the lending system for agricultural producers in Ukraine, determine the feasibility of creating agricultural cooperative banks, the development of land mortgage lending and other instruments of financial and credit support, taking into account the best world experience and the specifics of the functioning of the agricultural sector of the economy. Research methods. A dialectical method of scientific knowledge has been used, as well as a systematic research approach using the experience of lending in other countries, taking into account the results of scientific research by domestic scientists and reasonable assessments of the current state of credit services for agricultural producers, a set of methods for processing statistical data characterizing the dynamics and corresponding trends. Research results. The ways of further development of the system of financial and credit support of agricultural producers as an important component of agrarian transformations are determined, the best world experience is summarized, the assessment of the current state of lending to the agricultural economy is given. Scientific novelty. The further improvement of the credit support system for the needs of participants in the agricultural market in modern conditions was substantiated, as an important component of the comprehensive institutional support of the reform processes in the agricultural sector of Ukraine. Practical significance. The results of the study can be taken into account in the practical activities of government bodies, by participants in the agricultural market and the banking system, in the deepening of scientific research, in the educational process. Tabl.: 3. Figs.: 3. Refs.: 17.
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Kirechev, D. "IMPROVING ACCESS TO FINANCE FOR AGRICULTURAL HOLDINDS AS A FACTOR FOR THE SUSTAINABILITY OF AGRICULTURAL FINANCING IN BULGARIA." Trakia Journal of Sciences 19, Suppl.1 (2021): 197–206. http://dx.doi.org/10.15547/tjs.2021.s.01.030.
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The article analyzes the demand for finance and the supply of financial services. The assessment is that access to finance is a significant difficulty for Bulgarian farmers. Bulgarian farmers value their problems with access to finance at least twice as much as those of average European farmers. The main difficulties experienced by Bulgarian farmers and reflected in the demand for finance are determined by their needs for working capital, modernization of agricultural enterprises, and the purchase of agricultural land. The supply of agricultural loans is growing. The state of lending to the agricultural sector in the period after the country's accession to the European Union in 2007 is studied. In recent years, the supply of credit has increased. The main problems in the credit market are the concentration of the banking sector, the high levels of indebtedness, difficulties related to loan collateral. Lending is closely linked to financial support under CAP schemes. The development of financial support in combination with the improvement of the supply of agricultural finance is an important factor for achieving sustainable financing of agriculture in Bulgaria in the coming years. The need to improve the tools for improving the value chain in agriculture is highlighted.
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Abdulova, T. G., Z. Kh Sultanova, and M. K. Begeyeva. "Bank lending to agricultural enterprises in Kazakhstan: current state and problems." Problems of AgriMarket, no. 1 (March 15, 2022): 75–82. http://dx.doi.org/10.46666/2022-1.2708-9991.08.
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The goal is to determine the role of bank lending to agriculture, to analyze the sectoral structure of loan investments in real sector of economy, the volume of loans to agricultural sector, to clarify the reasons for the reluctance of banks to lend to AIC and to study the factors hindering the development of lending relations. In this regard, the objective was set to consider the state and identify problems of lending to agricultural entities by second-tier banks. The main problems of the availability of bank loans for agro-industrial enterprises are identified. Results – the current state of lending to agricultural production by commercial banks was analyzed, the main problems of the availability of bank loans were considered, and proposals on the effective financing of enterprises in agricultural sector of economy of Kazakhstan in modern economic conditions were developed. It is shown that the provision of agricultural enterprises with credit resources is determined by a number of features inherent in agriculture. Thus, the risky nature of agricultural activities is noted due to specific features and the lack of liquid collateral. The paper notes that banks are attracted to large businesses that are able to provide collateral and, accordingly, qualify for a large amount of lending funds. These factors, along with the financial condition, are decisive for creditor banks. Based on the analysis of bank lending to agricultural enterprises, it was concluded that the current system of lending to agricultural enterprises is not effective enough. The authors state that in order to ensure the availability of financial resources for agricultural producers, an optimal mechanism for the interaction between agricultural producers and commercial banks in lending procedure is necessary.
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Ascui, Francisco, and Theodor F. Cojoianu. "Implementing natural capital credit risk assessment in agricultural lending." Business Strategy and the Environment 28, no. 6 (April 7, 2019): 1234–49. http://dx.doi.org/10.1002/bse.2313.
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Cole, Shawn. "Fixing Market Failures or Fixing Elections? Agricultural Credit in India." American Economic Journal: Applied Economics 1, no. 1 (January 1, 2009): 219–50. http://dx.doi.org/10.1257/app.1.1.219.
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This paper integrates theories of political budget cycles with theories of tactical electoral redistribution to test for political capture in a novel way. Studying banks in India, I find that government-owned bank lending tracks the electoral cycle, with agricultural credit increasing by 5–10 percentage points in an election year. There is significant cross-sectional targeting, with large increases in districts in which the election is particularly close. This targeting does not occur in nonelection years or in private bank lending. I show capture is costly: elections affect loan repayment, and election-year credit booms do not measurably affect agricultural output. (JEL D72, O13, O17, Q14, Q18)
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Serebrennikova, Anna I., Aleksey V. Mikryukov, and Tatyana A. Tchilimova. "Socio-economic aspects of bank lending to agriculture." E3S Web of Conferences 176 (2020): 04014. http://dx.doi.org/10.1051/e3sconf/202017604014.
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The article is devoted to the socio-economic aspects of banks ' activities in relation to agricultural lending. The contextual background of the study is the social significance of agriculture for the country in terms of food security and the formation of a stable standard of living of the population. The purpose of the study was to reach the essential understanding of the social aspects of the Bank's activities by considering the social functions of the Bank in the lending process. The article considers the composition of credit subjects and gives a brief description of them. The activity of the State as a regulator of credit relations and a full participant in lending is emphasized. The essential understanding of the bank 's social functions in the context of solving the state 's social task of financing agriculture through the mechanism of concessional lending has been expanded. Conclusions are made about the leading role of the state in the formation of the mechanism of interaction between the Bank and the borrower with the strengthening of social functions of the Bank.
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Kim, Kevin Nooree, and Ani L. Katchova. "Impact of the Basel III bank regulation on US agricultural lending." Agricultural Finance Review 80, no. 3 (January 7, 2020): 321–37. http://dx.doi.org/10.1108/afr-11-2019-0124.
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Purpose Following the recent global financial crisis, US regulatory agencies issued laws to implement the Basel III accords to ensure the resiliency of the US banking sector. Theories predict that enhanced regulations may alter credit issuance of the regulated banks due to increased capital requirements, but the direction of changes might not be straightforward especially with respect to the agricultural loans. A decrease in credit availability from banks might pose a serious problem for farmers who rely on bank credit especially during economic recessions. The paper aims to discuss these issues. Design/methodology/approach In this study, the impact of Basel III regulatory framework implementation on agricultural lending in the USA is examined. Using panel data of FDIC-insured banks from 2008 to 2017, the agricultural loan volume and growth rates are examined for agricultural banks and all US banks. Findings The results show that agricultural loan growth rates have slowed down, but the amount of agricultural loan volume issuance still remained positive. More detailed examination finds that regulated agricultural banks have decreased both the agricultural loan volume and their loan exposure to the agricultural sector, showing a possible sign of credit crunch. Originality/value This study examines whether the implementation of the Basel III regulation has resulted in changes in agricultural loan issuance by US banks as predicted by the lending channel theory.
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Shadrack AKPORAWO, Peter Otunaruke Emaziye, and Onyeidu Samuel Osemedua. "Effect of agricultural credits on production among smallholder crop farmers in delta state." World Journal of Advanced Research and Reviews 16, no. 2 (November 30, 2022): 437–48. http://dx.doi.org/10.30574/wjarr.2022.16.2.1196.
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The study analysed the effect of agricultural credits on production among smallholder crop farmers in Delta State. Multistage random sampling procedure was adopted for the selection of 210 respondents. Data were collected from primary sources through the use of structured questionnaires and analysed through the use of descriptive and inferential statistical tools. The result showed that most of the respondents were in the age range of 41years to 50 years who were married with secondary school education. Majority were engaged in farming as their primary occupation having mean family size of 8 persons and an average annual income of N250,000. Majority obtained their credit from personal savings and cooperative societies. The major determinants of access to credit in the area were interest rate, type of enterprise, and farm size. The major constraints to obtaining credit were lending policies of credit institutions, lack of knowledge of rules and regulations and provision of collateral security. It is recommended that farmers should be encouraged to form farmers’ cooperative societies to improve access to credits.
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Poliatykina, Larysa, Iryna Samoshkina, and Victoria Borisova. "ACCOUNTING AND FINANCIAL PROBLEMS OF BANK LENDING TO AGRO-INDUSTRIAL ENTERPRISES IN UKRAINE." Baltic Journal of Economic Studies 8, no. 1 (January 30, 2022): 126–33. http://dx.doi.org/10.30525/2256-0742/2022-8-1-126-133.
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The purpose of the article is to study the problems of implementing the credit mechanism in the agrarian sector, the rationale for the need to increase the amount of lending to the agro-industrial complex and the analysis of existing studies of bank lending to agricultural enterprises. The issue of solving the problems of lending to the agro-industrial sector in the modern scientific literature is not addressed enough. In light of this, the above-mentioned issues require further comprehensive research in order to identify effective ways to solve the existing problems. Problem statement. The task of the research is to: study the current state of bank lending in the country, analyze the state of accounting and financial support for lending to agro-industrial enterprises and determine the prospects for the development of agricultural enterprises in Ukraine; analyze the shortcomings and formulate the main trends of these enterprises. As a result of the research to investigate the accounting and financial problems of lending to agricultural enterprises, to highlight in detail their main problems and features. Methodology. The analysis of the activities of agricultural enterprises and the peculiarities of its management. The issues of formation and functioning of farms, as well as document management and business administration in these farms are debatable. Results. According to the research, accounting and financial problems and possible prospects for lending in the agricultural sector of Ukraine were analyzed. As a result of the study, we have analyzed the state, problems and possible prospects of lending in the agrarian sphere of Ukraine. The features of credit relations of agro-industrial enterprises with commercial banks are revealed, the state and trends of development, as well as the modern conditions of bank lending to agricultural enterprises are analyzed. The need for the state support in providing this industry with affordable long-term lending resources and the introduction of preferential credit mechanisms for agricultural commodity producers is determined. Practical implications. Peculiarities of credit relations of agro-industrial enterprises with commercial banks are revealed, their state and development tendencies are analyzed, as well as modern conditions of bank crediting of agrarian enterprises. They develop the real economy, expand employment opportunities and promote competition. The necessity of intensifying the development of agro-industrial enterprises, which is an important task of the state, has been proved. The solution of accounting and financial problems of bank lending to agro-industrial enterprises in Ukraine should be based on the introduction of European experience, which will contribute to the creation of a modern market economy with social justice. Lending to agricultural enterprises by commercial banks is currently quite complicated, and sometimes even impossible. The reasons are low profitability, return on capital employed and liquidity of the property. At present, farmers are considering alternative options for the replenishment of working capital. Therefore, the avalisation of bills and agrarian receipts may be used as an alternative to bank lending to meet the needs for the crop protection agents, fertilizers and planting material. These methods make it possible to obtain a delay in payment for the acquired resources or financial resources for the acquisition of working capital in the provision of agricultural enterprises with future harvest. The formation of strategic directions of creditor activity of banking institutions of Ukraine is considered on the example of activity of JSB "UKRGASBANK". The article pays attention to the issues of credit insurance in order to protect the interests of banking institutions and improve the formation of directions for solving the problems of bank lending to agricultural enterprises. Value/originality. The need for state support in providing agricultural enterprises with affordable long-term loans and the introduction of mechanisms for targeted lending to agricultural producers, which is possible only through a balanced government policy of comprehensive support for this sector of the economy. The directions of the decision of problems of bank crediting of the agricultural enterprises are offered. The improvement of legislation on the agrarian policy, the regulation of lending operations, the rational distribution of funds, their effective use and timely repayment of debt, and the corresponding policy of the state could remedy the situation.
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Kovachev, Goran. "Financing agribusiness by state development banks - the case of Macedonia." Journal of Governance and Regulation 2, no. 3 (2013): 107–16. http://dx.doi.org/10.22495/jgr_v2_i3_c1_p3.
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In countries where agriculture has substantial role in generating domestic product, sustainable agro-finance can seriously increase economic development. It is well known that agriculture is perceived as risky to be financed by commercial banks. Therefore, creating specific agro-credit lines within state development banks is key element in enhancing agricultural activities. These state development banks, operating in close collaboration with the Government have a significant role in accelerating economic welfare of farmers and rural poor. This study tends to emphasize the importance of creating special lending products targeted towards agriculture. The focus will be put on comparison between the first pillar – direct lending to agriculture and second pillar – lending to agriculture through commercial banks showing the better viability of the later.
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Korobeinikov, Dmitry. "Evolution of Approaches to Preferential Lending in Agricultural Complex in the Post-Soviet Period." Regionalnaya ekonomika. Yug Rossii, no. 2 (July 2022): 143–51. http://dx.doi.org/10.15688/re.volsu.2022.2.14.
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One of the key mechanisms of state support for the agricultural sector is concessional lending. In the history of post-Soviet Russia, preferential agricultural credit has evolved from quasi-market forms of subsidized support for the industry into a classic bank loan with interest bonification. Therefore, the identification of problems typical of modern mechanism of concessional lending in the agro-industrial complex is impossible outside the historical context and the general logic of its development, which determines the relevance and purpose of the study. The tasks of the study are as follows: systematization of forms and methods of concessional lending in the agro-industrial complex in the content and chronological taxonomy; identification of modern problems of the mechanism of concessional lending and measures for their solution. The article shows that two main stages can be distinguished in the evolution of concessional lending in the agro-industrial complex. The first stage (1992–2000) was characterized by the preservation of approaches typical of a centralized economy, which led to the actual substitution of credit relations with implicit forms of budgetary financing of the industry. At the second stage (from 2000 to the present), the main form of credit relief for farmers was the subsidization of interest rates for borrowers, and later for lenders. However, despite the fact that the main problems were solved and the market moved to purely market support instruments, the preferential loan still have many problems, the main of which are the duration and complexity of the procedure, the lack of differentiation of requirements for borrowers, absence of seasonality understanding and operational specifics of agriculture, limited areas for the use of allocated funds, insufficient budget financing. The mentioned problems of preferential loans in the agro-industrial complex are the basis for further research in the field of its modernization and development.
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Kuethe, Todd, Chad Fiechter, and David Oppedahl. "Perceived competition in agricultural lending: stylized facts and an agenda for future research." Agricultural Finance Review 82, no. 2 (October 5, 2021): 417–37. http://dx.doi.org/10.1108/afr-04-2021-0045.
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PurposeThis study examines agricultural lending by commercial banks and the competition they face from the Farm Credit System (FCS) and non-traditional lenders, including merchants, dealers and other input suppliers.Design/methodology/approachWe construct a measure of commercial banks' perceived competition with FCS or non-traditional lenders using the individual responses to the Federal Reserve Bank of Chicago's Land Values and Credit Conditions Survey between 1999 and 2019. Through regression analysis of an unbalanced panel of survey responses, we present a number of stylized facts on the relationship between perceived competition and farm loan rate spreads, collateral requirements, loan delinquencies and expected lending volumes.FindingsOur analysis shows that the two sources of competition have very different effects on commercial bank lending terms, loan portfolio riskiness and expected loan volumes. With these results in mind, we offer a number of suggestions for future research.Originality/valueWe leverage the unique characteristics of the Land Values and Credit Conditions Survey to examine the competition with non-traditional lenders that cannot be observed using administrative data.
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Nehoda, Yuliia. "Agrarian receipts as a tool for the structural transformation of financial and credit relations in the agrarian business of the region." Problems of innovation and investment-driven department, no. 18 (March 3, 2019): 40–53. http://dx.doi.org/10.33813/2224-1213.18.2019.5.
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The subject of the research – is a set of organizational-economic relations arising in the process of structural transformation of financial and credit relations in the agricultural business. The purpose of the article is a retrospective analysis of structural transformations of financial and credit relations in the agricultural business, evaluation of the effectiveness and feasibility of the introduction of agricultural receipts as a new instrument of lending to the agricultural business of the regions. Methodology of work – system-structural and comparative analyzes (to determine the effectiveness of the crediting mechanism according to the agricultural receipts of the farmers of the region); monographic (when studying the problems of the functioning of the mechanism of lending to agrarians by agrarian receipts) economic analysis (when carrying out a comparative analysis of the mechanism of classical bank lending to the agrarian business and the mechanism of lending to agrarians according to agrarian receipts); modeling and forecasting (when determining ways to overcome the existing deficiencies in the mechanism of lending to agrarian business entities of the region according to agrarian receipts). The results of the work – a retrospective analysis of the structural transformation of financial and credit relations in the agricultural business was carried out. The mechanism of crediting agrarians according to agrarian receipts and the scale of its distribution in the agrarian business of the region are considered. A comparative analysis of the mechanism of classical bank lending to the agrarian business and the mechanism of lending to agrarians according to agrarian receipts was carried out. In the framework of the pilot project “Agrarian receipts in Ukraine” of the international financial corporation (IFC) in partnership with the Swiss Confederation in Ukraine, the example of the Poltava region defined the effectiveness of the crediting mechanism according to the agrarian receipts of the agrarians of the region. The advantages and disadvantages of the mechanism of crediting the subjects of the agrarian business on agrarian receipts are noted. The ways to overcome the existing shortcomings of the mechanism of crediting the subjects of the agrarian business of the region according to agricultural receipts are determined. Conclusions – according to the results of the conducted research, the effectiveness of the mechanism of lending to the agricultural business of the regions according to agricultural receipts was proved, its advantages and disadvantages were noted, and attention was also focused. Proposed in Art. 7 of Law No. 5479-VI clearly delineate cases and restrictions on the debtor’s reimbursement of expenses incurred by the lender with the acquisition of the right to grow and harvest the pledged crop of agricultural products, which will ensure the principle of equality of parties on economic benefits and distribution of credit risks according to agricultural receipts.
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Shmygol, N., O. Galtsova, S. Kushnir, L. Beisenova, S. Zasoba, and L. Matvejciuk. "RESEARCH OF CREDIT POLICY PROSPECTS IN THE DEVELOPMENT OF UKRAINE’S AGRICULTURAL COMPLEX." Financial and credit activity problems of theory and practice 1, no. 42 (March 31, 2022): 34–40. http://dx.doi.org/10.55643/fcaptp.1.42.2022.3570.
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Abstract. In the study, it was found that today bank lending to agro-industrial enterprises in the short term does not have economically justified prerequisites for its development and can not perform a stimulating function. Low or negative profitability and accumulated losses of previous periods do not cover the high price of credit resources. As a result, the attraction of credit funds in the economic activities of enterprises overtime only worsen the already difficult financial situation. On the other hand, the existing lending practice has already led to the fact that about 55% of loans are not repaid on time. That is why the banking system needs to apply stricter approaches to risk management when choosing counter parties. Otherwise, it will also threaten its stability. The scientific novelty of this work is the economic justification of the feasibility of lending to agro-industrial enterprises of Ukraine, based on banking statistics and modern approaches to financial management and, unlike the existing situation, taking into account the interests of both businesses and the banking sector. Keywords: agro-industrial enterprises, credit resources, banking system, financial management, borrowed capital. JEL Classіfіcatіon G21, G28, G29, O10 Formulas: 2; fig.: 0; tabl.: 1; bibl.: 15.
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NAMINOVA, Kermen A. "Distinctions and terms of soft financing to Russia's agricultural enterprises." National Interests: Priorities and Security 17, no. 4 (April 15, 2021): 649–63. http://dx.doi.org/10.24891/ni.17.4.649.
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Subject. Under the current circumstances, the State and commercial banks invent how to support agricultural producers due to the high priority of agriculture for the national security and the high standards of living of people. Soft financing is a mechanism the State uses to support agricultural enterprises, thus stimulating the agricultural production through debt finance. Objectives. I identify distinctions and determine positive and negative aspects of soft financing granted for agricultural producers. Methods. I referred to official data of the Federal State Statistics Service of the Russian Federation, Ministry of Agriculture of the Russian Federation, Russian Agricultural Bank. I applied methods of analysis and synthesis, induction and deduction, the systems approach. Results. I analyzed typical traits of soft financing to agricultural enterprises. The article indicates the role of authorized banks as systemically important credit institutions in Russia as part of the soft financing mechanism. I conducted the comparative analysis of commercial lending and soft financing to businesses, pointed out key differences between their mechanisms. The article spotlights the shortage of working funds, which results from distinctions of the agricultural sector. I investigated the impact of the sectoral and intrasectoral specifics of agriculture on the lending process. Referring to the key differences of commercial lending and soft financing to agricultural producers in the Russian Federation, I figured out positive and negative aspects of soft lending. Conclusions and Relevance. Agricultural producers operate, being exposed to high risk. Therefore, commercial banks take risks into account when setting up the cost of loans. High rates on loans are unaffordable for the majority of small and medium-sized agricultural businesses, thus complicating the finance of agricultural producers’ operations. Agricultural enterprises demonstrate a rather low profitability, thus impeding the performance of lending principles, such as repayment, timeliness, serviceability.
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ALESKEROVA, Yuliia, and Lidiya FEDORYSHYNA. "THEORETICAL ASPECTS OF THE ESSENCE AND FEATURES OF CREDIT RELATIONS IN THE AGRICULTURAL SECTOR OF THE ECONOMY." "EСONOMY. FINANСES. MANAGEMENT: Topical issues of science and practical activity", no. 2 (56) (June 29, 2021): 124–37. http://dx.doi.org/10.37128/2411-4413-2021-2-9.
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The article reveals the essence of credit, investigates the evolutionary prerequisites for the emergence and formation of the categorical apparatus of lending, defines the characteristic features of credit, which were studied by representatives of various theories. The stages of development of credit relations in society are systematized. The stages of development of credit relations, principles, functions and features of lending to enterprises in the agricultural sector of the economy have been investigated. The evolutionary aspects of credit as an economic category have been investigated from the standpoint of the capital-creation theory and the theory of credit regulation. It has been established that the main provisions of the capital-creation theory treat credit as a category independent of the reproduction process and as a decisive factor in the development of the economy. It is proved that the capital-creation theory received its development in the form of the expansionist theory of credit, based on the provisions on the infinity of credit and the deposits and capital created by it. It is proved that the essence of credit is revealed more deeply by the theory of credit regulation, which determines the priority role of the monetary system in the development of the state's economy, emphasizing its ability to regulate the economic system and prevent crisis phenomena. It has been established that the development of credit theories at the present stage is reflected in the redistribution and stock theories. It has been proved that it is expedient to use an integrated, multi-level approach to the study of the essence, functions, mechanisms of the functioning of credit and to determine its influence on the development of the state economy. The result of this research is the author's conceptual vision of credit as an economic category, which systematically covers the essence, role and functions of credit. The legitimacy of the existence of a separate mechanism of credit relations in the agricultural sector of the economy, covering credit institutions, the credit market, credit policy and the credit flows themselves, has been proved. The essential characteristics and features of agricultural credit are systematized and the priority features of credit facilities in agriculture are highlighted. Five groups of factors have been formulated that affect the availability of credit for business entities in agriculture in modern conditions.
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Kantoroeva, Aijamal K., and Nurzat K. Toktomamatova. "Ijara as an Innovative Product in Agricultural Financing." International Journal of Agricultural Extension 9, no. 4 (August 18, 2021): 141–47. http://dx.doi.org/10.33687/ijae.009.00.3729.
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The relevance of the study is due to the necessity to solve the problems of agricultural lending in the Kyrgyz Republic. The problems of financing and lending to agriculture are still urgent in the Kyrgyz Republic, therefore, specific financial instruments of Islamic banking, which are highly appreciated in the practise of other countries, are well suited for project financing, work in conditions of high uncertainty characteristic of agriculture in the Kyrgyz Republic. The purpose of the study was to identify alternative loan products for agricultural economic entities based on Islamic principles of financing in the Kyrgyz Republic. Research objectives: to provide brief information on the current state in the field of agricultural lending; give brief information on the development of Islamic principles of lending in the Kyrgyz Republic; define the concept and classification of Islamic banking instruments in agriculture; define the financial instrument “Ijara” and identify its advantages. Research methods: methods of the empirical level (studying of literature and other sources of information, observation, comparison), methods of the theoretical level (study and generalisation, analysis and synthesis). In the process of writing this article, Islamic banking instruments have been reviewed and classified. The concept of Ijara contract was considered, new modern technologies in the field of Islamic banking were investigated. The main distinctive principles of Islamic banking from the Western model of financial leasing were analysed. The credit history of agriculture and forestry of the Kyrgyz Republic was analysed.
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Zhichkin, Kirill, Vladimir Nosov, Lyudmila Zhichkina, Eduard Badanin, Liudmila Voloshchuk, and Olga Kotar. "Commodity lending in the region agriculture." E3S Web of Conferences 217 (2020): 09004. http://dx.doi.org/10.1051/e3sconf/202021709004.
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The article examined the existing experience of using commodity lending. The work purpose is to identify the features of commodity lending as an element of the state support system for agricultural production. Within the framework of this goal, the following tasks were solved: - theoretical aspects of commodity lending were studied; - the american experience of using commodity lending within the framework of the Commodity Credit Corporation was reviewed; - proposed commodity lending classification in agriculture; - the Samara region experience was studied and promising directions for the development of commodity lending in the region were proposed. In the Samara region, the state support operator in the form of commodity lending is the SUE “Veles”, which has been operating since 2010. Thanks to the activities of the SUE “Veles” from 2011 to 2016 it was possible to change the livestock reduction negative trend in the region and ensure its growth.
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Chisasa, Joseph. "An Econometric Analysis Of Bank Lending And Agricultural Output In South Africa: A Survey Approach." Journal of Applied Business Research (JABR) 31, no. 1 (December 15, 2014): 163. http://dx.doi.org/10.19030/jabr.v31i1.8998.
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This paper analyses the role of credit on the performance of smallholder farmers in South Africa. Applying survey data involving 362 respondents from North West and Mpumalanga provinces the study utilises the Ordinary Least Squares to estimate the Cobb-Douglas production function with agricultural output as the endogenous variable and bank credit, land, labour and rainfall as the independent variables. Credit is observed to have a positive and significant influence on the agricultural output of smallholder farmers at the 1% level of significance. A 1% increase in the amount of credit yields a combined incremental effect of 0.375% on output. When disaggregated, short-term credit contributes 0.14% while long-term credit induces output growth of 0.231%. The coefficient for land was found to be positive and significant at 5%. Labour and rainfall, albeit positive were insignificant. The paper concludes that availability of both bank credit and land stimulate growth in the agricultural sector. Therefore policies directed at increasing the supply of credit to smallholder farmers are recommended.
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Ogbeide-Osaretin, Evelyn Nwamaka, and Timothy Igbafe Aliu. "Empirical Investigation on Domestic Credit to Private Sector and Rural Development in Nigeria." Journal of Developing Economies 4, no. 1 (August 17, 2022): 35–46. http://dx.doi.org/10.47672/jde.1150.
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Purpose: This research sought to investigate the substantial effects of private-sector lending on Nigeria's agricultural output by applying yearly time series data spanning 1981 to 2020.
Methodology: This study used time series design and Ex-post facto to analyse its data. The data were collected directly from Central Bank of Nigeria (CBN) Statistical Bulletin and Annual Reports. The study used the Autoregressive distributed lag method (ARDL) for the analysis. It used the Autoregressive distributed lag model. The study's variables included agricultural productivity, which was utilized as a stand-in for rural development. Credit to the private sector, broad money supply, lending rate, exchange rate, government capital expenditure, and government capital expenditure were the control variables.
Findings: The findings showed that credit share to the private and lending rate hold a considerable negative impact on agricultural productivity in both the short-run and long-run period. Broad money supply, exchange rate, and government capital expenditure have positive and significant influences.
Recommendations: The study, therefore, recommends that by modifying the lending rate structure in the banking sector, a more accommodative monetary policy may foster an environment that is more conducive to investment, in order to boost agricultural production. Also, the Central Bank, in its function as the Federal Government's advisor, should take advantage of this platform to make sure that the nation's infrastructural problems are resolved in order to increase the country's capacity to absorb credit.
JEL Classification: C22, G11, Q14, R110
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Ropafadzo, Chigunhah Blessing, Svotwa Ezekia, Munyoro Gerald, Mabvure Tendai Joseph, and Govere Ignatius. "Characterization of Bank Lending Requirements for Farmers in Zimbabwe." Asian Journal of Agriculture and Rural Development 10, no. 2 (September 1, 2020): 628–44. http://dx.doi.org/10.18488/journal.ajard.2020.102.628.644.
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Bank credit availability is vital for enhancing farm productivity, income, and farmer livelihoods. This study sought to characterize the lending requirements considered by commercial banks when lending to farmers in Zimbabwe. Primary data were collected from a cross-section of 12 registered commercial banks. Relative Importance Index (RII) and Thematic analysis analysed data. High importance lending requirements that were always considered by all commercial banks when lending to farmers included credit history, productive farm assets, business registration, loan purpose, amount, and repayment source. Agricultural production skills, age, business plans, financial statements, social reputation, and project insurance were also mandatory in the majority of the commercial banks. High to medium importance lending requirements included extension support, business management skills, bank account ownership, own contribution, and personal savings. Medium importance requirements included formal basic education, alternative income, and freehold land ownership. Therefore, besides the widely documented collateral, local commercial banks also considered several other requirements when lending to farmers. Government policy should go beyond solving the collateral issue but benchmark its policies to other bank lending requirements. Farmers should also pursue personal development programs in agricultural production, business, and financial management. They should also invest in off-farm assets to ensure collateral availability.
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Miroshnichenko, T. "INCREASING FINANCIAL INCLUSION FOR SMALL AGRIBUSINESS AS THE BASIS FOR THE SUSTAINABLE DEVELOPMENT OF RURAL AREAS." TRANSBAIKAL STATE UNIVERSITY JOURNAL 28, no. 5 (2022): 93–100. http://dx.doi.org/10.21209/2227-9245-2022-28-5-93-100.
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Financial inclusion, considered as the provision of financial opportunities and access of the rural population and small forms of management (SFM) to financial and credit resources, is an important factor that allows an agricultural business to expand, create jobs and reduce inequality in the village. The subject of the study is financial and credit tools that provide financial inclusion of the SFM in agriculture. The purpose of the study is to assess the state and development problems of financial inclusion of small agricultural producers, as well as determining directions and economic measures that contribute to its increase in order to ensure sustainable development of rural areas. Research methods. The study has been carried out using such general scientific methods as: analysis and synthesis, induction and deduction, abstract-logical method. The empirical base of the study is based on the data of the Ministry of Agriculture of Russia, the Federal State Statistics Service, the Central Bank of the Russian Federation. Research results. SFM and the economy of the population are manufacturers of a significant share of agricultural products and provide employment in the village. However, such a necessary preferential lending for a number of reasons remains for them inaccessible and insufficient for the development of agricultural production. One of the alternative sources of borrowed funds for small agribusiness and the population is agricultural credit consumer cooperation (ACCC). The growth of the portfolio of loans of the ACCC indicates their demand in rural territories. However, the presence of a number of accumulated problems of the institutional, organizational and economic nature led to a reduction in the number of rural credit cooperatives. Based on the results of the study, directions and economic measures are proposed to increase the financial availability of preferential lending for the SFM and the development of ACCC
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Adewale, A.T, Lawal O.A, Aberu, F, and Toriola A.K. "Effect of Credit to Farmers and Agricultural Productivity in Nigeria." East Asian Journal of Multidisciplinary Research 1, no. 3 (April 26, 2022): 377–88. http://dx.doi.org/10.55927/eajmr.v1i3.99.
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In Nigeria, there has been a continuous decline in farmers access to credit facilities. This study examined the effect of farmers credit on agricultural productivity from 1981 to 2016 using data from World Bank Development Index (WDI). The result of the Ordinary Least Squares (OLS) estimation shows that agricultural bank credit (β=0.667173, t=5.961095 & P<0.05) exerts a significant positive effect on agricultural output. Bank lending rate (β=1.094792, t=1.295874 & P>0.05) and foreign exchange rate (β=0.124297, t=0.437929 & P>0.05) do not show a significant effect on agricultural output. It was submitted that bank credit has a significant positive effect on agricultural productivity in Nigeria. The need for government to promote savings and bank credit to farmers was recommended.