Trends and prospects of the Ukrainian credit market post-crisis development

Abstract

The article deals with the transformation processes that took place in the credit market of Ukraine under the influence of the modern financial and economic crisis. In the article have been analyzed problems and factors that caused the long stagnation of the credit activity in banking sector especially in certain types of bank lending. The author notes that the main reason of such a long credit contraction in the banking sector was the week institutional development of the Ukrainian credit market in previous periods. It is the lack of developed credit market institutions that caused problems of proper protection of the creditors' rights, non-performing loans management and hedging of market risks. In the article has been pointed out on the discovered tendency of active growth of the share of loans issued in the non-banking sector. At this stage, the trend is quite active, but mostly occurs in the segment of short-term consumer lending and in the area of instruments alternative to mortgage lending. Despite the market nature of the process reflecting this trend, due to the underdeveloped institutional infrastructure, it also poses a potential risk of increased fraud activity and over-indebtedness of the households. Based on the analysis of the characteristics and processes in the Ukrainian credit market the author has made conclusions about the importance of state assistance in the development of regulatory and legal support of the Ukrainian credit market in order to restore bank lending and strengthen supervision of the non-banking sector of the credit market. It is emphasized that without a state-initiated solution of the institutional problems present on the credit market of Ukraine, the recovery of the credit market may take an indefinite period of time.