Status of bank crediting to small businesses in the defense sector in ukraine

The article examines the current state of bank lending to small businesses in the defense sector in Ukraine. An analysis of the component expenditures of the state budget in 2021–2024 has been carried out; in particular, the share of defense expenditures has been determined. It has been found that defense production requires working capital for the purchase of components, covering the gap between the advance and the need for funds, relocation of enterprises, and provision of uninterrupted/alternative power sources. An analysis of current lending programs for small and medium-sized enterprises managed by Ukrainian banks in 2023 (JSC CB “PrivatBank”, JSC “Oschadbank”, JSC “Sense Bank”, JSC “Ukrgasbank”, JSC OTP BANK, JSC “Taskombank”, JSC “KredoBank”) has been carried out. The structure and volumes of loans issued to entrepreneurs within the framework of the Affordable Loans at 5-7-9% state program during the period of martial law have been studied, and their sectoral structure indicates that the funds have been being directed chiefly to agriculture – 52%, wholesale trade – 17% and food industry – 8%. A range of problems faced by small businesses in the defense sector in the process of bank lending has been outlined, in particular: lack of contracts with the Ministry of Defense of Ukraine, the need for weapon use approval, short-term nature, obtaining permission to export weapons, high interest rates, military risks, lack of collateral property, etc. The priority measures for expanding lending to the defense sector in Ukraine by the National Bank of Ukraine, the Ministry of Strategic Industries of Ukraine, and the Ministry of Finance of Ukraine have been systematized. It has been proposed that preferential state programs for bank lending be introduced to small businesses in the defense sector. Keywords: bank lending, small business, defense sector, support program, state program.