FORMATION OF THE EFFECTIVE FINANCIAL RELATIONSHIPS OF AGRICULTURAL FARMS WITH CREDIT AND FINANCIAL SYSTEM IN UKRAINE

During the research it was determined that applying a loan is an essential part of the process of functioning of small and medium-sized business in agriculture. A special attention should be paid to the issue of farm lending by credit unions. This direction in loans can help out of difficult financial crisis both farmers and credit unions. By investing money in farming and manufacturing – we invest money in our future as a powerful agricultural country. It has been proved that in the field of microcredit, especially in rural areas, credit unions are the only source of financing for small and medium-sized enterprises. Peculiarities of functioning of credit unions have been researched. To ensure the access of small businesses to short-term “cheap” loans of small size the implementationof Microcredit Program by means of local credit unions has been considered. The main advantages and features of the program are: loans for starting a business; the possibility of getting loans without security; low loan interest rate (max 15 %); loans of small size (up to 20 000 UAH.) for short term; participation of State Executive authorities, local self-government. The analysis of credit unions of Ukraine, which indicates a downward trend in the amount of assets and loan portfolio of credit unions in Ukraine, leading to a decrease in their number due to the closure has been made. The reasons which led to the crisis of credit unions have been determined. Some recommendations have been offered regarding the creating of a credit history bureau for a single borrowers' database formation; acceleration of the process of formation of powerful credit union associations. The requirement is to create a regional stabilization fund that can facilitate the access of a credit union to financial support, and cooperation of the regional funds at the state level will helpto monitor their liquidity. To solve the problem of credit repayment it is offeredto delegate this authority partially to a single special body - the Agency for dealing with bad loans.