Modeling the Credit System in the Conditions of Interaction of the Banking Sector with Microfinance Organizations for Financial Support of Agricultural Business

Today, financial support for small agribusiness through the development of microfinance institutions is an alternative to consumer lending and a priority of socio-economic policy in many countries around the world. The purpose of the article is to justify the need to improve the credit system, adapted to the needs of banks and the microfinance sector, as the most effective mechanism for lending to small agribusiness, taking into account the design of its scientific, theoretical and methodological basis, consistent with best foreign practice. The subject of the study is a system of effective interaction between microfinance organizations and financial market participants. The article discloses the main principles of modelling a credit system to expand and develop the microfinance segment and create mutually beneficial cooperation between credit organizations and microfinance organizations. The economic nature of microfinance was clarified. The most essential features characterizing the possibilities of using microloans by small agribusiness were identified. Direct and indirect approaches of banks to enter the microfinance market were considered. Institutional prerequisites for the development of microfinancing models of small agribusiness were justified. The current state of microfinance infrastructure in foreign countries was examined, as well as its tools, taking into account existing legislation. The western practice of microfinance organizations functioning was reviewed and the differences in their activities in different countries were structured. The mechanism of interaction between banks and microfinance organizations in the foreign practice of microfinancing of small agribusiness was specified. The forms of improving the credit infrastructure for the development of microfinance organizations were justified. The decision-making model for commercial banks in microfinance of agricultural production was proposed. The developed credit system modeling strategy based on partnership of banks with microfinance organizations for financial support of small agribusiness. Methodical recommendations on improving the microfinance segment of small agribusiness were developed.