Improving the financing mechanism for the development of local communities based on the use of digital technologies

Abstract

The object of this study is the financing mechanism for the development of local communities. The paper addressed the problem of improving this mechanism under conditions of limited resources through the use of digital technologies. The structure of the mechanism is represented as interconnected subjects, sources, methods, objectives, and technical infrastructure of financing. Local self-government bodies are the managing entity. Factors affecting the availability of financial resources, depending on the financing method, are the volume of resources, the orderliness of legislation and legal models, financial capabilities, and interests of financing entities. They also include legal restrictions on application, requirements of resource holders, their cost and duration of receipt. The crisis was recognized as a significant limiting factor. Identification of factors of accessibility and complexity makes it possible to identify weak points in the entire funding mechanism. The description of the theoretical concept of the financing mechanism due to its universality, the factors of the availability of financial resources and the shortcomings of the technical infrastructure, identified on this basis, made it possible to solve the investigated problem. As a result, directions for improving the financing mechanism for the development of local communities have been determined in terms of technical infrastructure. They consist in creating unified technical systems for managing financing processes and expanding training and support for financing entities. The use of artificial intelligence, big data, blockchain and tokenization technologies for decision-making, forecasting the needs of local communities and the development of crowdfunding is also proposed. Owing to this, it will be possible to achieve practical expectations for improving the effectiveness of the existing financing mechanism, which consists in reducing transaction costs, attracting additional financial resources, increasing public participation and transparency of financial processes