Overview of the current state of consumer lending in commercial banks of Ukraine and its organizational and economic support

Abstract

The paper gives the theoretical basis of the peculiarities of the process of consumer lending in commercial banks – defines the economic essence of consumer credit, its objects, tools, stages of implementation and mechanisms for repayment of credit debt. An overview of the current state and development of bank consumer lending in Ukraine is presented. An analysis of the dynamics of assets and loan portfolio of Ukrainian banks, namely: analysis of loans to individuals and analysis of the volume and share of consumer loans in the total loans to individuals in the loan portfolio and assets of banks in 2015–2021. The peculiarities of the formation of the retail loan portfolio of Ukrainian banks are studied and the directions of improving the level of organizational and economic support of consumer lending of Ukrainian banks are outlined. A necessary condition for ensuring the stability of the banking system is the development of bank lending. Constant changes in the market of banking services and openness to the external environment require banks to constantly search for markets and lending mechanisms, including consumer credit. It is the development of consumer lending that determines the formation and increase of effective demand of the population, and thus the development of the economy as a whole. Therefore, the intensification of long-term bank lending available to borrowers is one of the most important tasks of Ukraine's strategic development. In recent years, there has been a growth trend in the consumer lending sector, which, on the one hand, has become an indicator of intensification of banks' lending, but on the other hand, rapid growth in retail lending has led to increased debt and unprofitable individual banks. Therefore, there is an objective need to increase the level of organizational and economic support for consumer lending to Ukrainian banks in order to avoid credit risk. An important way to increase the profitability of consumer lending is to improve the quality of loans. To this end, it is recommended to improve the work of the bank's departments for monitoring problem loans, the use of scoring systems, the introduction of insurance of financial risks of banks on card lending.