SCIENTIFIC AND THEORETICAL BASIS OF CONSTRUCTION OF THE MECHANISM OF MUNICIPAL CREDITING

Abstract

The article investigates the views of scientists on the essence of the notion of "mechanism of crediting".  However, research on the nature and structure of the mechanism of municipal crediting in the context of decentralization reform is practically absent. Lack of the scientific and theoretical foundations of the construction and functioning of this mechanism determined the relevance, purpose, and tasks of this study.

The purpose of the article is to substantiate the essence and elaborate a conceptual scheme for constructing the mechanism of municipal crediting in the context of the decentralization reform.

In our opinion, the mechanism of municipal crediting is a set of forms of provision, principles, methods, tools, and regularities, which help to increase the level of financial self-sufficiency of local self-government bodies for the full implementation of their functions, tasks and powers. The mechanism interacts with systems of international, state, bank, interregional, intermunicipal, and participative crediting. The main forms of provision of such a mechanism are institutional, legal, informational, and organizational support.

The sphere of financial and credit relations at the local level is regulated by the use of various financial instruments. Therefore, in our opinion, the mechanism of municipal crediting should include the following instruments: transfer, communal property management, local borrowing, enforcement of debt obligations by local governments, project risks.

In addition to the instruments, this mechanism includes levers and methods of influence of the state, local self-government bodies on the system of financial and credit relations. The main among such levers are economic, tax, financial, and administrative.

Besides the well-known principles of credit, which include payment, term, purpose, security and return, the municipal credit includes the following: scientific substantiation, mixed financing, economic feasibility, trust, transparency and openness, ensuring financial security.

Due to the rational construction of this mechanism, the development of a strategy and tactics of financial policy aimed at achievement of the stability and effectiveness of financial systems functioning at the regional level is ensured.

The sphere of financial and credit relations at the local level is regulated by the use of various financial instruments. Therefore, in our opinion, the mechanism of municipal crediting should include the following instruments: transfer, communal property management, local borrowing, and enforcement of debt obligations by local governments, project risks.

In addition to the instruments, this mechanism includes levers and methods of influence of the state, local self-government bodies on the system of financial and credit relations. The main among such levers are economic, tax, financial, and administrative.

Besides the well-known principles of credit, which include payment, term, purpose, security, and return, the municipal credit includes the following: scientific substantiation, mixed financing, economic feasibility, trust, transparency, and openness, ensuring financial security.

Due to the rational construction of this mechanism, the development of a strategy and tactics of the financial policy aimed at achievement of the stability and effectiveness of financial systems functioning at the regional level is ensured.