Digitalization of lending to small and medium business

Introduction. In Ukraine, small and medium-sized businesses (SMEs) are currently the back­bone of the economy: they add about 60 % of value added each year.2020 was another test for business due to the COVID-19 pandemic, which forced companies to borrow. Problem. The pandemic has identified new challenges for both SMEs and creditors in digi­tally transforming their own business processes. The aim of the paper is to identify the main trends in lending to small and medium-sized enterprises in Ukraine during the pandemic and to determine the ways for digital transformation of SMEs lending processes. Methods. General scientific methods of ana­lysis and synthesis, induction, de­duction, compa­rison, a systematic approach to identify features of a lending digital trans­for­mation, as well as analytical and statistical me­thods to justify SMEs lending during the pan­demic were applied in the study. Results. The authors concludethat there is an increase in the share of lending to SMEs, except micro-enterprises during the pandemic.The study shows thatcurrent trend is specified by lower interest rates on loans (except micro-enter­prises, which are characterized as the most risky). Lending has undergone significant digital trans­formations (online applications, simplified deci­sion-making, mobile applications, digital allian­ces) in the context of the pandemic. Conclusions. The dynamics of lending of SMEs in Ukraine during the pandemic indicates their readiness to use borrowed funds during the crisis. The pandemic has become a driver to the digital transformation of SMEs lending with innovative approaches to service delivery, cus­tomer service, consulting, software, targeted cre­dit products and relationships within digital alliances.