THE DEVELOPMENT OF “GREEN” LENDING IN THE BANKING SYSTEM OF UKRAINE

Abstract

The article substantiates theoretical and methodological approaches, as well as the practical aspects, of developing “green” lending in the Ukrainian banking system. The content of “green” finance instruments is examined; a comparative analysis of the main characteristics of “green” lending and lending linked to sustainable development is carried out; and the main principles, advantages and disadvantages of “green” lending are systematised. It has been demonstrated that considering strengths and weaknesses is a key aspect of selecting “green” lending products through which banks enter the market. Based on an analysis of indicators of the state and quality of lending processes within the banking system, trends in changes of volumes, structure and innovations in this segment of the banking market have been outlined. The activities of key players in the “green” lending market – namely, the banks that are most actively implementing environmentally oriented financing instruments and supporting sustainable development projects – are characterised. A set of proposals has been put forward to improve “green” lending in the Ukrainian banking system. Implementing this set of measures will enable banks to increase the availability of “green” loans to a wide range of borrowers, expand their customer base and increase the share of the “green” portfolio within their overall lending portfolios. In a broader context, this will help to strengthen the position of ESG banking in Ukraine and ensure that the banking system contributes to developing an energy-independent, sustainable economy as the country undergoes reconstruction.