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The absence of affordable lending resources to fund the real sector of economy in Ukraine significantly worsens the conditions required for the development of the domestic business environment and competitiveness. How will a Ukrainian producer be able, on the eve of the launch of a free trade with the EU, to maintain their niche on the domestic market while getting access to foreign markets, if the conditions in which such a producer is operating are "draconian" compared to those created for its foreign partners? It is known that credit costs in the EU amount to 3-5%, in Ukraine they stand at 22%, while commercial lending is much more expensive. Such a huge burden on businesses must be relieved, with the lending terms to be extended and the financial policy improved, in general. This issue was raised in the article prepared by the ULIE President Anatoliy Kinakh in Holos Ukrainy newspaper.
The country is seeing imports and exports declining simultaneously, industrial production are fully dependent on the market situation, and the solvency of the internal market has fallen significantly. However, the Government and the National Bank of Ukraine do not propose any serious adequate measures to implement lending programs for the industrial sector, and the state's debt under refunding VAT negative balance and advance payments of income tax reaches UAH 47 billion.
"So instead of cash "infusions" under credit portfolios, entrepreneurs are experiencing a situation opposite to this - "depletion" of their working capital, which has a disastrous impact on their competitiveness, opportunities to upgrade production and carry out exports, amid a sluggish domestic market," said Anatoliy Kinakh.
He points to the fact that Ukrainian banks have actually curtailed serious lending programs for the real sector of the economy. The average rate under the most popular loans, used for replenishing working capital of companies, has increased 30% since the beginning of the year, which is unacceptable for the industry, as well as small and medium businesses.
"The economic demise, which we are currently witnessing due to lack of financial resources, leads to degradation of the whole system and de-industrialization, when not only individual plants, but the whole industry shuts down," the ULIE President said.
Anatoliy Kinakh noted that industrialists, businessmen and representatives of non-governmental and academic circles have worked out a number of measures - a comprehensive anti-crisis plan for improving the situation, and they are ready to collaborate with the government in order to put this plan into action.
It is necessary to establish mechanisms for providing guarantees under loans disbursed by commercial banks to enterprises, as stated in the anti-crisis program. Those loans will motivate producers, which, in turn, will result in creation of jobs, better prosperity and "reviving" of the domestic market.
State leadership and top ministries have already familiarized themselves with the document. Entrepreneurs hope it will be taken into consideration, because the proposed effective measures that have been developed by hundreds of experts will have a positive impact on the Ukrainian economy and business.