MORTGAGE LENDING IN UKRAINE: BACKGROUND AND CURRENT STATE

Abstract

The preconditions of the mortgage market development in Ukraine are investigated. The current state of mortgage lending in industry, housing construction and agriculture are analyzed. It is proved that at present state assets at Ukrainian enterprises are in need of updating, renovation, modernization. Labor productivity in industry and agriculture remains extremely low due to the inconsistency of industrial and agricultural equipment with the world-class equipment, technology, mechanization and automation. Solving the problems of industrialization and business entities modernization requires long-term low-risk lending that corresponds to the characteristics of the mortgage, which is confirmed by the experience of the mortgage lending market formation and development and diversification in the world.
An analysis of the mortgage loans provision for small businesses and entrepreneurs has been carried out. It is emphasized that there is a discrimination in lending to them – higher interest rates on lending.
Structured analysis of domestic banks-subjects of mortgage lending in three directions is formed: industrial lending, residential mortgages, mortgage lending to agribusiness enterprises. It is concluded that these loans cannot be considered mortgages on the terms of issue and the level of interest rates on loans granted in Ukraine. Mortgages and mortgage lending have some differences. Mortgage lending involves a long term issuance and a low interest rate on the funds received while mortgage is a loan with reduced creditor’s risks.
A comparative analysis of the interest rates on mortgage loans in Ukraine and certain European countries, in relation with minimum wages in Ukraine and certain European countries has been carried out, which demonstrated the prerequisite for the development of mortgage lending for housing construction. The existence of a systemic problem of incomplete housing construction, which is not solved by the state, leads to investors losing money, and, most importantly, losing confidence in the financial and credit system of the country.
The necessity of mortgage lending elaboration in agriculture is substantiated. Two models of land mortgages: one-level and two-level are considered. The rating of TOR-15 of the best agribusiness in Ukraine in 2018 is given. The current problems of mortgage lending are determined. It is concluded that the development of mortgage lending in Ukraine needs legislative support in terms of property rights status changing; state support in loans guaranteeing and unfinished projects solving; finding the alternative financing sources, including crowdfunding.