The National Bank of Ukraine called on the government to narrow the program “Affordable Loans 5-7-9%”, leaving it primarily for businesses that suffer the most from war risks. The regulator believes that the main source of lending should be market financing, not state subsidies.
In its June financial stability report, the NBU noted that macroeconomic conditions already allow for the gradual restoration of commercial lending. At the same time, a significant share of preferential loans in banks’ portfolios creates additional risks for the financial system.
“Preferential loans, in our opinion, should be available only to a certain group of clients who are most vulnerable to war risks”, – emphasized the First Deputy Chairman of the NBU Serhiy Nikolaychuk.
The National Bank recalled that the “5-7-9%” program has already been revised, in particular, compensations to banks were reduced to balance its budget. However, even after these changes, the state’s debt to banks for compensation payments may continue to grow this year.
The regulator proposes to more actively use credit guarantees, in particular with the participation of international financial organizations. The NBU considers such a mechanism to be a more effective alternative to direct loan subsidies.
Banks are also advised to expand market financial instruments. Among the promising areas, the National Bank names consortium lending for enterprises of the defense-industrial complex and factoring after updating the relevant legislation.
Separately, the NBU warned that the planned restriction of farmers’ access to the program may reduce lending to the agricultural sector. To optimize the program, the regulator proposes to strengthen the criteria for enterprise participation and switch to a model of fixed interest rate compensation.
