Economic Sciences /
10. Business Economics
Golyshevska A.
Supervisor: Tomchuk S.
Vinnytsia National Agrarian University, Ukraine
ESSENCE AND CHARACTERISTICS OF
MORTGAGE
CREDIT IN AGRICULTURE
Mortgages
are widespread throughout the world. Making effective system of mortgage is in
Ukraine. Mortgage loans increase the investment potential of the national
economy, and that this is its main economic function.
Law of
Ukraine "On mortgage", gives the following interpretation of the
term: "mortgage - mortgage of immovable property when the land and (or)
other things that are the subject of the mortgage, stay in the mortgagor or
third person (the property trustee), mortgagee acquires the right to meet the
obligations secured by mortgage, if it failed due to the mortgage "[2].
In
countries with market economies mortgage plays a vital role. It is no
exaggeration to say that it is essential to functioning capital markets.
The
basic idea of the introduction of mortgage lending is expanding opportunities
for producers, including agriculture, access to long-term and cheap credit.
Specified may be achieved through the extensive development of medium and long
term production loans by attracting significant volumes of financial resources
(including the international capital markets) due to the capitalization of land
and real estate.
In
total credits granted by commercial banks, business entities for loans to
agriculture, hunting and forestry accounted for just 8%, of which almost 60%
short. Among other sectors of the economy is agriculture in terms of
"volume of bank credits per unit of gross value added" almost in last
place. Even within the agricultural sector level, lending directly to
agricultural producers to four times less than other companies in the sector.
In general, however, estimated the demand of agricultural producers on the
loans are not fully satisfied, if the demand for short-term loans covered about
50%, the long-term - only 2% [1].
The
system factors that shape the enabling environment the operation of any entity,
one of the main places allocated to provide credit resources, especially the
nature of the investment. Agricultural producers concerned primarily because
they are the largest among the other sectors are ignored by banks, and thus
suffer from a lack of available and long-term credit.
The
essence of mortgage relations in the agricultural sector is the same as in
other sectors. However, mortgage relations in agriculture have their peculiar
only to them, especially. These should include first mortgage of land for
agricultural purposes. Under current legislation in Ukraine collateral may be
land (including agricultural), which are private property of citizens of
Ukraine.
As you
know, Ukraine's agriculture is in dire need of long-term lending for development
of its logistics. The only real security for such loans can be a mortgage of
land. Limited opportunities for mortgages in agriculture of Ukraine due to the
peculiarities of national legislation and other causes, including the price of
agricultural land. However, this does not mean that the mortgage of land for
agricultural purposes in Ukraine wasted.
Conversely,
circumstances in the agricultural sector of Ukraine, requiring the active
participation of all stakeholders, especially state in testing mechanisms of
mortgage of land for agricultural purposes. Poor financial situation of
agricultural enterprises leads to impairment of fixed assets, including real
estate. Bail devalued assets not allow companies to attract significant
financial resources, dramatically will narrow their investment opportunities,
low creditworthiness of the vast majority of agricultural producers can lead to
overly broad application of forced mortgage.
The
introduction of mortgage lending on the security of agricultural land aims to
create an effective system of refinancing of mortgage lenders that are
extremely relevant in the context of the peculiarities of the future of the
mortgage and potentially significant needs of the agricultural sector in the
investment share.
The
uncertainty in long-term stability of the Ukrainian currency leads to
unpredictable long-term financing prospects, and still high lending rates
narrows his options. In the long-term mortgage of land may be an important area
of investment in agriculture in Ukraine.
Thus,
in agriculture prevailing unfavorable conditions for the implementation of the
mortgage. In such a situation should find innovative options for solving this
problem so that maximum use of minimum capabilities.
References:
1.
Obmok V. Development of a mortgage of agricultural land / Accountancy in
agriculture. -2004. - ¹ 15.-C.2-4
2.
About mortgage. Law of Ukraine ¹ 898-L from 05.06.2003r. VVR.-2003 .- ¹ 17.