INTERACTION OF THE REAL SECTOR OF THE ECONOMY AND CREDIT SPHERE: FINANCIAL IMPACT

Lyudmila Fedosenko, Tatyana Ivanova

Abstract


Introduction. The article discusses the relationship of the real economy and the credit sector. An attempt has been made to assess the financial consequences of the over-indebtedness of business entities and its impact on the state of the banking sector of the Republic of Belarus.

Purpose. Based on a study of theoretical and applied aspects of the relationship between the real and financial sectors, to assess the impact of bank lending on the state and development of the economy of the Republic of Belarus and the financial consequences of the borrowing of business entities.

Results. It has been established that there is a contradiction between the sectors, which is reflected in the fact that with the improved financial results of economic entities, there is an increase in credit risk in the banking sector, which is caused by many factors, including key lending and refinancing of loans. It was concluded that the growth is not due to the effective use of credit resources, but to excessive government intervention in the regulation of credit processes.

Originality. It has been established that there is a contradiction between sectors, which is manifested in the fact that with the improving financial performance of business entities, there is an increase in credit risk in the banking sector, which is due to many factors, among which a key role is played by directed lending and refinancing of loans. It is concluded that the growth is caused not by the efficient use of credit resources, but by excessive government intervention in the regulation of credit processes.

Conclusion. Studying the relationship between the real sector of the economy and the credit market, it was found that they are in contradiction, which is expressed in the fact that with the growth of financial results in the first, credit risk in the banking sector increases. This is due to excessive government interference in lending processes through direct lending, refinancing of loans, and the fact that the regulator recommends issuing loans to insolvent state enterprises. Excessive borrowing of the non-financial sector of the Belarusian economy, associated with the constant refinancing of credit debts, cannot be considered in the long term as a means of solving the problem of maintaining sustainable growth and can aggravate the situation not only in this sector, but also in the banking sector, which is the main supplier of financial resources.


References


Karachentseva, T.I. Credit support for the real sector of the economy. Access mode: http://www.bseu.by/russian/scientific/herald/ - Access date: 04/11/2019 (in Russian).

Vlasenko, M. About the main indicators of the debt burden on the economy. Access mode: https://mail.rambler.ru/ - Access date: 03/10/2019 (in Russian).

Analytical review “Financial stability in the Republic of Belarus 2017”. Access mode: https://www.nbrb.by./ - Access date: 02/28/2019 (in Russian).

Authorities plan to abandon policy lending in 2020. Access mode: https://news.tut.by/economics - Access date: 05/20/2019 (in Russian).

Directive lending at the end of the year should be less than 1% of GDP. Access mode: https://www.belta.by/economics./ - Access date: 05/23/2019 (in Russian).


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