SYSTEM RISKS OF MORTGAGE LENDING IN AGRARIAN SPHERE: ASSESSMENT AND WAYS TO REDUCE

Abstract

The multicomponent structure of the agricultural mortgage lending resource potential causes the complexity of quantitative and qualitative assessment of the risks that may arise in the system.
The purpose of this work is to assess the systemic risks to the lender arising from the mortgage lending to agriculture and to determine the directions of their minimization.
The methods of quantitative and qualitative economic risks level assessment in mortgage lending have been applied in the article: statistical method; rating method; method of analogies; decision tree method; sensitivity analysis; method of expert assessments; analytical method. A matrix of methods for assessing the risk factors of the resource potential of mortgage lending in the field of agricultural production has been constructed. The internal risks of the mortgage lending system have been determined depending on the subject of the credit relations: risks of the lender; borrower’s risks; risks of intermediaries; risks of investors. The lender’s liquidity risk has been assessed using the liquidity risk proxy. The credit risks in the agrarian industry and in the banking system of Ukraine have been analyzed. The algorithm of decision making by the lender on the application of methods and tools of risk management has been developed. A model of functional interaction of risk management institutes in the mortgage system has been developed. It has been proposed to introduce the State Mortgage Agency into the institutional structure of the domestic mortgage system. The functional responsibilities of the State Mortgage Agency have been defined: completing mortgage-backed securities portfolios, their implementation and support. Benefits of the mortgage agency functioning have been substantiated: reduction of risks of creditors by transfer of mortgage pools to the state agency and investors by carrying out transactions with the insured mortgage securities in the stock market. The necessity of proper legislative support for the functioning of the State Mortgage Agency has been emphasized.