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Vol. 3 No. 1, 2022
DOI: https://doi.org/10.30525/2661-5150/2022-1-7

MACROECONOMIC VISION OF THE ESSENCE OF FINANCIAL 
RESOURCES OF ENTERPRISES IN AGRICULTURE

Nadiia Hryshchuk1

Abstract. The purpose of the work is to study the essence of financial resources of enterprises, their current state 
in the economy of Ukraine, the definition of priority financial instruments to provide financial resources to the 
agricultural sector. Methodology. Theoretical and methodological basis of research are general and special methods 
of scientific knowledge: generalization, analogy, analysis and synthesis, induction and deduction (to clarify the 
conceptual framework, theoretical generalizations of research results, conclusions and proposals); economic-
statistical and tabular methods are used. Results. It is established that the economic activity of the agrarian sector 
largely depends on the volume and types of financial resources. The development of the industry and the state is 
impossible without a sufficient level of financial resources, their focus on the priority areas of the national economy 
and effective use. Financial resources are an important factor in the progressive development of any economic 
system and economic entities of the agricultural sector. It was found that the volume of financial resources in the 
domestic economy remains low due to the imperfect legislative framework, underdeveloped financial and credit 
system, strong tax pressure, inefficient use of depreciation deductions, low level of transformation of population's 
savings. The analytical assessment of the types of financial security showed that the attraction of soft loans and 
various types of financial resources by economic entities of the agro-industrial complex will improve financial 
security. Prospective financial resources of enterprises in the field of agriculture allow access to competitive 
positions of representatives of the agrarian sector. Practical consequences. According to the results of the study, 
priority areas for improving the financial resources of economic entities, which will contribute to financial security, 
through a balanced and sound public policy to support the economic activity of agricultural enterprises and the 
implementation of the proposed recommendations for businesses and authorities, were identified.

Key words: financial provision, financial resources, budget financing, competitiveness, agricultural enterprises, 
crediting, strategic directions of financial provision.

JEL Classification: P34, G30, G32, Q14

1. Introduction
Financial support of agricultural enterprises is 

carried out in accordance with current economic 
laws, which is the basis of social reproduction in the 
country. However, these laws have certain specifics 
in the sphere of the national economy in which they 
operate. Financial support is an important element 
of the financial management system, the purpose of 
which is to transform financial resources into capital 
in monetary form by attracting money and their use 
for certain purposes. Financing is the basis of financial 
provision, and the elements of the financial mechanism 
act as a regulator of functioning.

With regard to the agricultural sector, it is important 
to take into account the full range of features 
inherent in agricultural production, especially 
those that are not subject to regulatory influences 

from both agricultural enterprises and the state. 
The identification of all the features of agricultural 
production, their understanding and consideration 
is a prerequisite for the reproduction of products 
by agricultural enterprises. The content of financial 
support of agrarian sector is a set of principles, tools 
of use, general and specific methods, algorithms of 
formation, distribution, redistribution and use of 
financial resources acting between the subjects of 
agrarian business.

The basis for the organization of financial support 
of agricultural enterprises is a well-defined regulatory 
framework, justification of the volumes and sources 
of financial, credit and investment sources. Financial 
support of reproductive processes in agricultural 
enterprises becomes possible if financial resources are 
available and used.

This is an Open Access article, distributed under the terms 
of the Creative Commons Attribution CC BY 4.0

Corresponding author:
1 Vinnytsia National Agrarian University, Ukraine
E-mail: nadiia.hryshchuk@gmail.com
ORCID: https://orcid.org/0000-0002-3960-7841



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The term "resources" comes from the French 

resource "help" and the Latin resurgere "to straighten, 
raise up" a supply, a source, a means, an opportunity 
for realization. In modern conditions the financial 
resources of agricultural enterprises are treated as an 
independent object that requires effective manage-
ment, and the financial management system is 
characterized as a subsystem of financial management, 
including both general elements and specific, closely 
interrelated and interacting with each other and 
comprehensively affecting the process of formation, 
distribution, assessment and use of financial resources 
of the enterprise with the use of certain methods, 
techniques, management tools, taking into account  
the key and special principles in the implementation 
of the chosen financial strategy. Today the financial 
resources of agricultural enterprises are filled with new 
content and require further implementation.

2. Literature review
The works of many domestic scientists are devoted 

to the study of the essence of financial resources 
of enterprises, including problems in the field of 
agriculture (V. Aleksiychuk, O. Gudz, L. Gutsalenko, 
N. Davydenko, I. Demyanenko, M. Demyanenko, 
A. Dibrova, G. Zabolotny, O. Yermakov, G. Kaletnik, 
C. Kvasha, L. Khudoliy).

Scholars' views on the nature of financial resources 
can be traced back to medical research. According 
to a prominent Ukrainian scientist, G.G. Kireitsev 
(2002), the economic category "resources" at the level 
of an economic entity has a number of features; in 
particular, the need for resources is associated with the 
process of production and creation of consumer value; 
the structure of resources is dynamic and depends 
on the development of the enterprise, the stage of 
its operation, industry and sphere of the economy; 
the use of any kind of resources involves their cost 
reproduction (resources from the material form go 
to the cost or financial). Financial Encyclopedia  
provides the following definition – "financial resources" 
(English financial resources, from the French 
Resources – funds, stocks) – the totality of funds,  
money, resulting from the distribution and redistri-
bution of the total public product and national income 
and are at the disposal of the state, local authorities, 
enterprises, organizations of various forms of owner-
ship. Financial resources of enterprises are funds 
available to enterprises, including: cash, part of cash 
used in non-fund form, securities, currency values.

Scientists A. G. Zagorodniy and G. L. Vozniuk (2000) 
in the Financial and Economic Dictionary explains  
that "financial resources" is a set of funds available  
to the state and businesses and are their source of 
industrial and social development. They characterize  
the financial condition of the economy and are 

divided into centralized (created at the state level) 
and decentralized (created at the level of enterprises, 
organizations, associations). In the work "Essays 
on the Theory of Soviet Finance" by the economist 
O. M. Byrman (1972), the term "financial resources" 
refers to the part of national income expressed in money, 
which can be used by the state (directly or through an 
enterprise) for expanded reproduction and for general 
state expenditures.

This vector of macroeconomic vision of the essence 
of financial resources emphasizes the concept of 
interconnection between the emergence of financial 
resources and the processes of distribution and 
redistribution of gross domestic product and national 
income, in which the leading role belongs to the state.

Further research into the economic essence of 
financial resources was influenced by the above 
approaches to the interpretation of this category. As 
for the definition of the economic essence of financial 
resources, the scientists identified the advantages, 
which are divided into two approaches and are based  
on the distributive and reproductive concepts of 
finance. Proponents of the distributive concept of 
finance support the position about the emergence 
of finance in the process of distribution and redistri- 
bution of the value of the total social product and 
national income, whose main functions are distri- 
bution and control. Other proponents of the 
reproductive concept attribute the existence of finance 
to all stages of the reproductive process, including  
the stages of production and exchange of goods.

Exploring the concept of "financial resources" 
V. V. Buryakovsky (1988), under financial resources 
means the money accumulated in special-purpose 
funds for the implementation of relevant costs. The 
vision of the peculiarities of the construction of the 
concept of "financial resources" of Professor N. M. 
is quite successful and original. Davydenko (2013), 
who primarily provides a theoretical justification for 
the place, role and importance of financial resources, 
considering finance as an economic category that is 
positioned separately.

From the point of view of I. Zelisko (2014) – financial 
resources can be used as a management tool, based 
on their impact on production processes. They are 
characterized by material characteristics with different 
value and level of liquidity.

According to reproduction theory, this aspect  
allows financial resources to manifest themselves at all 
stages of reproduction of production.

L. M. Khudoliy (2014) notes that in order to fully 
meet the needs of enterprises in financial resources 
as a process of ensuring the activities of the entity  
through the use of different methods, it is urgent to 
use different tools. It is necessary to direct financial 
managers to constantly search for the most effective 
of them, to adapt to the requirements of creditors, 



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in order to best meet the needs of enterprises in  
financial resources.

3. The current state of financial resources  
of enterprises in agriculture

The main priority of state policy in the vector of 
European integration is to change the orientation of 
the state in the direction of increasing the investment 
attractiveness of rural areas, the introduction of 
restructuring of rural economic infrastructure for  
a balanced multifunctional development, the forma-
tion of organizational and economic tools for risk 
management and security (Kaletnik, 2020).

In Ukraine, the agricultural sector plays an important 
economic role with a share of 9% in the gross domestic 
product (gross domestic income in 2019). As of 2020, 
the entire economy employs more than 14% of the 
population. By comparison, in Germany, the human 
economy has a share of 0.82% of gross domestic 
income, and only 1.17% of the population is employed 
in the sector (World Bank 2020). One of the differences 
between small and medium businesses and large 
businesses is that large businesses attract financing from 
additional sources for expansion and development of 
the enterprise, while a small business enterprise seeks 
and attracts financial resources in the course of current 
activities. The main problem in small business is the 
lack of working capital. In this regard, there is a need 
for small and medium enterprises to attract additional 
sources of financing.

If a company has quality and good collateral, it can 
choose which source of financing suits it best:
1) Internal resources (i.e., funding from retained 
earnings, through capitalization or a bank loan against 
the owner's deposit, etc.).
2) Traditional bank lending.
3) Issue of corporate bonds on the domestic or foreign 
market, IPO, etc. 
4) Commercial lending – prepayment of goods by 
buyers and deferred payment to suppliers. 
5) REPO transactions are essentially a loan secured by 
securities belonging to a company, with the transfer of 
ownership of those securities to the lender in one hour.
6) Factoring, leasing, project financing, export 
financing, etc. 

As of 2020, farms have received 71,573.2 thousand 
UAH of state support. The corresponding distribution 
of funds was approved under the budget program 
"Financial Support of Agricultural Producers" in the 
direction of "Financial Support for Development" by 
the following development funds:
– provision of partial compensation of the cost of 
purchased agricultural machinery and equipment  
of domestic production in 2019 for a total amount 
of 24 400.5 thousand UAH. The funds will be 
received by 460 farms that purchased 1,152 pieces of 
equipment;

– providing partial compensation for the cost of  
sowing agricultural plants of domestic production, 
purchased from individuals – entrepreneurs and legal 
entities, which employs 53 UAH. Funds will be provi-
ded to 447 farms that purchased 3 368.4 tons of land;
– provision of budget subsidy per unit of cultivated  
land (1 ha) – other farms for October-November 
2019 for a total amount of 25 992.0 thousand UAH.  
861 farms will receive funds.

For 2021, the government has prepared a program 
to support the development of farms in the following 
areas:
– budget subsidy for keeping cows;
– additional payment in favor of the insured persons 
– members / chairmen of SFG without acquiring the 
status of an EU legal entity;
– partial reimbursement of expenses related to the 
provision of agricultural advisory services;
– budget subsidy per unit of cultivated land (1 hectare) 
– for newly created farms;
– financial support on a revolving basis.

It is also possible to receive compensation for 
agricultural machinery of own production. Certain 
compensation of the cost of purchased agricultural 
machinery and equipment of own production are 
received by farms on a non-refundable basis in the 
amount of 40% of the cost of purchased machinery 
and equipment without taking into account the tax 
amount noted in the certificate of acceptance and other 
documents which confirm payment through the state 
bank-participant.

According to the budget program "Financial support 
for agricultural producers," the following support is 
provided:
– in the direction of "Partial compensation of the cost 
of agricultural machinery and equipment of domestic 
production" in the amount of 25% of the cost;
– in the area of "Financial support for the development 
of farms" in the amount of 15% of the value.

Also one of the important areas of state support is 
the reduction of agricultural loans. Of the total number 
of authorized banks that signed the Memorandum of 
Understanding on the general principles of cooperation 
with the Ministry of Economy (36 banks), 33 banks 
participated in the provision of funds by the bank.

TOP-5 leaders among the regions with the most 
loans – Odessa (UAH 91.6 million), Kharkiv  
(UAH 71 million), Ternopil (UAH 68.9 million),  
Cherkasy (UAH 65) and Vinnytsia (66.5)  
UAH 4 million) of the region.

The largest number of loans was provided 
by the following banks: Raiffeisen Bank Aval  
(UAH 112.2 billion, of which UAH 8.5 billion was 
offset), Credit Agricole Bank (UAH 8.9 billion, of 
which UAH 1.4 billion was compensated), ProCredit 
Bank (UAH 3.9 billion, of which UAH 
3 billion was compensated), Oschadbank (UAH 



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2.6 billion, of which UAH 2 billion was compensated,  
UAH 5 billion), Privatbank (UAH 1.7 billion, of 
which all are compensated) and Ukreximbank  
(UAH 1.6 billion, of which UAH 1.4 billion is 
compensated) (Table 1).

In 2020 the state budget allocated UAH 2 billion to 
finance the program "Cheap loans 5-7-9%", through 
which more than 50,000 loans may be granted. Under 
the support, Ukrainian companies with fewer than 
50 employees and a maximum annual income of 
50 or 50-100 million UAH may take loans for business 
development in the amount of up to 1.5 million UAH 
with a maximum term of 5 years and receive loans  
with state support for payment of the interest rate. 
Interest costs are reduced from 9% to 5%. Loan 
guarantees are provided for loans to micro and small 
businesses that do not have sufficient assets to transfer 
as loan collateral or are characterized by increased 
indebtedness.

This support program was opened to the entire 
economy after the 2020 drought. A total of 6 billion 
UAH has already been provided for support under 
 this program. A program for irrigation of agricultural 
land is also to be launched.

International financial organizations play an 
important role in lending to Ukrainian businesses. 
However, attraction of funding from these organi- 
zations is a rather complicated and time-consuming 
process, as a result of which it is possible to get 
significant amounts for the relevant project at relatively 
low rates. The list of international organizations working 
in Ukraine in this direction is presented below:
1) COSME European Small and Medium Business 
Support Program. COSME is a support program that 
includes a set of thematic projects and programs that  
run from 2014 to 2020, with a total budget of  
€ 2.3 billion, there are 25 sub-programs, which are 
classified into three areas: new access to foreign 
markets, increased competitiveness and the formation 
of a culture of doing business. Representatives of  
small and medium-sized businesses, public 
organizations, regional development agencies,  
business organizations, organizations and organizations 

have the opportunity to participate in COSME 
programs.
2) Programs from the European Bank for Recon-
struction and Development: from engaging expert 
consultants to providing grants. The European Bank 
for Reconstruction and Development supports 
entrepreneurs in various industries, such as: food 
and beverage production, wholesale and retail trade, 
retail trade. Grants are provided for activities related 
to business development, such as: IT consulting, mar-
keting initiatives, transition to European reporting 
standards, exit. The main focus is on business 
development in the regions – 65% of projects are 
implemented outside Kyiv. The EBRD provides grants 
to companies with a staff of less than 250 people, with  
a period of activity not exceeding 2 years.
3) The German-Ukrainian Foundation provides 
microcredits and lending programs for priority sectors. 
Microcredit is a program for individuals, micro, small 
and medium enterprises. It finances the areas of 
production, services, agricultural economy and trade.

Loans are equalized from 25 to 250 thousand UAH  
for 3-5 years. The program of crediting of priority 
branches is financing and preferential conditions for 
agriculture, fish farming, food industry, development 
of small hotels, green tourism, restaurant business, 
light industry, projects, from efficient energy and 
power supply, as well as projects on increase of 
labor productivity and creation of work places in 
problem regions. Under this program loans of up to  
300 thousand in hryvnia equivalent are issued.

4. Problems of attracting  
and using financial instruments

In Ukraine there is a clear problem of attraction 
and use of assets and inefficiency of obsolete financial 
instruments. That is why the analysis of Ukraine and  
its regions in terms of attracting incentives and the  
use of financial instruments determines the relevance 
of the study. When searching for sources of financial 
resources an agricultural enterprise proceeds from  
the purpose of activity and available resource 
opportunities, prospects of their attraction and receipt.

Table 1
Status of attraction of preferential loans by subjects of management  
of agro-industrial complex in 2020, thousand UAH

Authorized banks
Number of 

companies involved 
preferential loans

Preferential loans attracted

Total In short term Average urgent long-term

AT ProcreditBank 251 3 027 989,9 1 563 800,9 143 600,2 1320 588,8
JSC "Credit Agricole Bank" 139 1 418 861,9 833 489,0 308 747,4 276 625,6
Raiffeisen Bank Aval 763 8 503 107,3 4 404 188,6 1 645 497,8 2453 420,9
JSC Oschadbank 560 2 484 841,4 274 389,5 1 897 179,3 313 272,7
JSC AT KB PrivatBank 2026 1 681 642,6 869 865,2 435 680,0 376 097,4

Source: grouped by (Loan reduction program)



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 The activity of agricultural enterprises is connected 

with many directions, which becomes possible due to 
the structural transformation of the sources and types 
of financial resources attracted.

This aspect is important to consider when an 
agricultural enterprise aims at such a vector of 
development with the developed production strategy, 
which does not provide for the formation of the  
most efficient and financially sustainable structure of 
financial resources.

Thus, if the management of the enterprise and 
its owners are aimed at increasing the return on 
invested capital, as well as ensuring the control and 
regulatory impact on the economic process, the 
solution of property and income distribution, then 
under these conditions is provided and supported by 
a perfect, optimal structure of the sources of financial  
resources.

In this situation, based on modern financial theory, 
the company 's management will direct its activities to 
attract a significant amount of financial resources. It 
will be necessary to attract these resources taking into 
account the price of use, the terms of repayment, the 
most attractive payment terms and the possibilities of 
achieving financial performance with minimized risk 
and an acceptable level of the rate of return. It is also 
important to consider the chosen financial strategy and 
management tactics of the organizational and economic 
development scenario.

If to imagine that the enterprise operates at the  
expense of its own financial sources of product 
reproduction, then at the initial stage the borrowed 
resources are not used. In accordance with this 
management scenario, an appropriate financial strategy 
and tactics should be formed. Thus, the management 
of the enterprise will be aimed at ensuring economic 
development by generating and transforming  
borrowed resources and borrowed financial resources  
to ensure the development of the enterprise.

The tools for implementing such financial tactics  
will be credit resources and interest for their use. 
A necessary condition will be the ability of an agri-
cultural enterprise to pay for the use of credit resources 
in excess of the achieved level of profitability.

In turn, this development will lead to an increase  
in the price of equity as a result of an increase in the 
amount of borrowed funds and the price of their use.

Such a financial scenario, according to value theory, 
would increase financial risks and increase the 
probability of bankruptcy of an agricultural enterprise. 
As a result, the weighted average cost of capital will 
move to the current level of the rate of return. This, 
in turn, will restrain the development vector of the 
enterprise aimed at increasing the generation and use of 
financial resources.

If an agricultural enterprise reaches a minimum in 
the level of the difference between such indicators 

as the weighted average cost of capital and the rate of 
return in the course of its activities, it will be forced 
to stop raising additional borrowings due to their  
increase. At the same time, creditors can stop financing 
the activities of agricultural enterprises. The reason for 
this decision may be the lender's desire to help maintain 
the borrower's positive financial position by preventing 
the borrower from borrowing significant amounts of 
money from the company, which would negatively 
affect the lender's income.

The financial situation is quite contradictory and 
ambiguous. So, on the one hand, companies have 
a direct financial interest in increasing external 
borrowings for economic growth and financial 
strengthening. However, such a financial strategy will 
eventually lead to the need to consider and compare 
the potential of external borrowings and the ability 
to meet their obligations. External borrowings must 
be within the potential ability to generate profits that 
can be used to repay service obligations. A positive 
financial scenario has significant advantages in terms 
of increasing the company 's capitalization. However, 
if the resource of profits for repayment of liabilities 
is exhausted, this financial condition should be 
considered the limit of increased borrowing and 
growth of borrowed capital.

5. Ways and vectors for further development
Structures that finance the activities and development 

of the enterprise should be primarily interested 
in the current diagnosis of the financial condition 
of the agricultural enterprise. Their interest lies in 
guaranteeing the repayment of borrowed funds, as 
well as in the potential threats and the ability of the 
agricultural enterprise to fulfill its obligations. If the 
company has exhausted reserves for further increase of 
additional borrowings and increase of the share of debt 
capital in the structure of financing, then the best way 
of further financial support is to reformat the financial 
policy and focus on the vector of development, based 
on the increase of equity capital. For this purpose two 
tactical directions of financial strategy implementation 
are possible.

First, through the generation and accumulation of its 
own profits, especially its undistributed part. Second, 
by increasing equity, and on its basis the formation 
of own financial resources created by the owners of 
the enterprise. Thus, the formation of own financial 
resources at the expense of own sources and the increase 
in equity is an important component of the financial 
independence and autonomy of agricultural enterprises. 
This scenario is the most promising for the company 
in terms of minimizing financial dependence and 
maximizing the level of creditworthiness. The logical 
manifestation of such financial solvency is the cyclical 
attraction of credit resources in direct dependence on 
the financial positive performance of their use, which 



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is an objective consequence of generating profits and 
using them to ensure continuous production and create 
a potential basis for improving the competitiveness 
of agricultural enterprises. This process of circulation 
of financial flows for the formation and generation of 
financial resources includes the following components:

The agricultural enterprise will carry out additional 
borrowings and use additional borrowed sources of 
financial support, the availability of which will be 
financially justified, taking into account the ratio of 
profit and payment in the form of interest on borrowed 
funds. In modern conditions profitable activity should 
be considered as the difference between profit before 
taxation and payment of interest on borrowed funds and 
the amount of accrued interest for the use of borrowed 
funds. The rule is implemented: the expediency of the 
use of borrowed funds is limited by the level of the 
difference between profit and the amount of accrued 
interest. This process is prevented by the presence of 
a negative value of this difference as an indicator of 
unprofitable activity of the enterprise.

In a difficult financial situation regarding the 
possibility of finding and attracting additional borrowed 

funds of the enterprise, given the optimal price of 
using these sources, this indicates a significant amount 
of debt compared to the existing amount of equity  
(Figure 1).

Table 2
The impact of borrowed sources of financial resources on the activities of small and medium-sized enterprises

Directions of the influence of credit 
sources on the activities of enterprises

Factors limiting the use of borrowed sources

Strengthening the material and 
technical base

Lack of access to long-term financing necessary for expanded reproduction, due to the lack of 
significant and stable long-term liabilities in the banking system, the risk of long-term cooperation 
of credit institutions with farmers

Accelerating turnover revolving assets
Significant duration of the operating cycle in the industry, low solvency of agricultural enterprises, 
which leads to increased risk of bankruptcy due to late repayment of debt
Imperfect system of rationing working capital

Accelerate the turnover of current 
assets

Low purchasing power of population, growth of accounts receivable and emergence of non-
payment crisis

Growth of financial potential and 
investment activity

The reluctance of potential investors to invest in the agricultural sector of the economy due to high 
economic and political risks
High risks and lack of reliable support – land market

Reduction of the tax base by crediting 
interest on the loan to the cost of 
businesses

Reduced mass of profits and return on capital advanced due to the need to pay interest and 
dividends

Diversification of sources of financing 
the economy activities

Difficulty in attracting funds because of the large number of documents required to obtain credit, 
and the long time it takes to review them
Low level of access to credit resources, low level of creditworthiness of agricultural producers, lack 
of effective insurance protection
Weak development of financial and credit infrastructure of the agricultural sector, psychological 
and practical unpreparedness of managers and specialists of agricultural enterprises to attract new 
modern forms of loan capital
The emergence of specific risks associated with the financial activities of the company in the market 
of borrowed capital

Opportunity to increase return on 
capital

Partial loss of control and the ability to manage the activities of the enterprise
The emergence of specific risks associated with the financial activities of the company in the market 
of borrowed capital

Gaining access to government support
The procedure for obtaining budget compensation for agricultural enterprises is complicated
Lack of equal access to state support (for unprofitable enterprises, farms, small producers, newly 
created enterprises, etc.)

Source: generalized by the author

the company further 
raises funds

Attracting additional 
borrowed funds

If the profit is>% 
for the loan

The company can 
be unprofitable

Increasing the 
amount of equity

Figure 1. Harmonization of equity and debt capital ratio 

Source: built by the author



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It is logical in this case to stop borrowing, which can 

lead to unprofitable activities and prevent tendencies  
to reduce the level of capitalization of the enterprise.

The illustrated stages of formation and transfor- 
mation of the sources of financial resources of the 
enterprise are based on the ideology of ensuring the 
possibility of the next stage subject to the final use of 
the previous stage. This approach is explained by the 
fact that the enterprise does not seek to increase debt  
by increasing the cost of debt service.

This is due to a number of factors:
In the case of an increase in borrowed funds, the 

cost of their service and use increases, which in turn 
leads to negative financial consequences for the value 
of the enterprise. Also, if there is a need for additional 
financing of investment activities, the limit of availa-
bility of borrowed sources may be exhausted. In this 
situation the enterprise is in a financial conflict about  
its ability to meet the financial needs. Therefore, the 
general vector of the financial strategy of the enterprise 
should be the application of preventive measures to 
contain the growth of the cost of borrowed loans.

The main of such preventive measures should be the 
growth of equity, which will be a limiting factor in the 
convergence of net income and the cost of servicing the 
use of borrowed loans. In this sequence of stages, there 
is a certain pattern of maximum borrowing of financial 
resources in the structure of all financial resources. The 
content of the process that takes place at each stage is 
expressed in the possibilities of financial growth, which is 
limited by the ability to increase borrowing. At the same 
time, if the strategic structure of the sources of financial 
support is determined, these processes stop, if it is 
achieved. Another scenario can also be effective. Given 
the uncertainty of the most optimal and acceptable  
level of the structure of sources of financial support, on 
the part of the owners of the enterprise and the existing 
goal of management to generate the maximum amount 
of financial resources, it is possible to repeat cycles and 
stop them for other reasons. Such a limiting factor may 
be the market reaction.

For agricultural enterprises, in conditions of difficult 
financial opportunities and limited access to available 
sources of financing, a competent financial policy and 
rational approach to the problem of financial support 
is important. A significant role in the provision of 
agricultural enterprises, in the content of which a special 
place is occupied by credit reduction, is carried out in 
order to attract loans to the agricultural sector and to 
create real conditions for their reduction.

The average interest rates of banks at which 
agribusinesses attracted loans were 14-16% per annum. 
Although this is not a significantly high rate compared 
with previous years, it does not stimulate agribusinesses 
to obtain loans.

In addition, it should be noted that the NBU discount 
rate today is only 6% per annum.

This problem lies not only in the significant margin 
that banks have to charge for loans, but above all in the 
high risk of agribusiness, as well as in the lack of effective 
business planning for projects that could offer loans 
with much lower interest rates to financial institutions.

Overdraft is a special form of short-term credit 
provision within the limit set by the bank, which allows 
making payments when there are not enough funds 
on the client's settlement account to make a payment 
transaction. Under the terms of the overdraft, the bank 
credits the client's settlement account for the appropriate 
payment of settlement documents in case of lack or 
absence of funds on the client-borrower's settlement 
account. In addition, the bank deducts funds from  
the client's account in full, automatically granting 
the client a loan in excess of the balance. It should be  
noted that an overdraft differs from an ordinary loan 
primarily in the fact that all funds received on the 
customer's current account are used to repay the debt.

In case of temporary shortage of funds in the 
current account, the bank offers an overdraft. It will 
help optimize settlements with partners and ensure 
uninterrupted financial and economic activities. It is 
a kind of additional insurance for business. Clients prefer 
an overdraft, as the interest is accrued only on the used 
loan amount. An overdraft is beneficial for a company 
because it can at any time replenish its working capital, 
which is insufficient for settlements, at the expense of 
the bank.

According to item 2 of Art. 1069 of the Civil Code, 
the rights and obligations of the parties related to 
the crediting of the account are determined by the 
provisions on the loan and credit. Since an overdraft 
is a type of loan, it can be made out in a contract.  
The agreement specifies the terms of the loan:

The overdraft agreement sets to the client an overdraft 
limit – the maximum amount within which he can make 
payments from his current account in excess of the 
actual balance on it. The overdraft limit is determined 
on the basis of data on the client's financial condition 
and depends on the size and dynamics of receipts on 
the current account. Depending on its own policy, each 
bank sets its own conditions for determining it. But, as 
a rule, the overdraft limit is determined as a percentage 
of the application – 10-14% of the average monthly 
income on the account of the enterprise for the last 
three to six months. Sometimes the overdraft amount is 
set at twice the average daily balance of the account for 
the last 30 calendar days.

In the financial market, according to the analysis of 
information of the NBU, interest rates on new loans 
in September 2021 were, in particular, for agriculture, 
forestry and fishing – only 16.0% – overdraft, 
respectively, 16.9% (Table 3).

Compared to the previous year, interest rates on  
loans to the agricultural sector decreased due to 
a decrease in the NBU discount rate.



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It is also important that USAID lends to Ukrainian 
farmers through credit unions. The United States  
Agency for International Development (USAID) 
has developed a project to lend to Ukrainian farmers,  
which is being implemented by the World Council of 
Credit Unions (WOCCU). According to the statistics 
of the National Commission for Public Utilities, this 
year the number of members of credit unions in Ukraine 
decreased by 13% – up to 674.1 thousand. Unions  
of the Lviv region (110.7 thousand people) are in the 
lead in terms of the number of participants, and the 
unions of Kyiv and the Kyiv region (UAH 576.7 million) 
are in the lead in terms of assets. The European Union 
and Ukraine have signed new agreements on financing 
in the amount of 105 million euros for the support 
of Ukrainian small and medium-sized enterprises of 
the Polish economy and the development of small 
agricultural enterprises of Ukraine. The agreement also 
aims to mitigate the socio-economic consequences 
of the coronavirus pandemic and continue to support 
the health sector. The support of the agricultural sector 
and the development of small agricultural enterprises  
will be provided by 25 million euros, which will 
improve access to loans for small agricultural enterprises 
throughout Ukraine under the EU4 Business Program 
and the rapprochement of Ukraine. From the recently 
signed agreement aimed at improving the business, 
business environment through the harmonization of 
legislation of Ukraine and the European Community, 
access, to loans for the modernization of enterprises, 
consulting enterprises, experts on the subsequent 
development of enterprise skills and access to global 
markets in the initiative. Many other individual states, 
as well as private and political initiatives are active 
in Ukraine and support Ukraine's development in  
various areas.

The evolution of financial instruments is of great 
importance for the development of agricultural 
enterprises. Timely access to finance gives 
producers the opportunity to invest in production, 
increase productivity and profitability. In mature 
sectors of the economy, producers need more 
financial resources and further exploration of 
new tools and applications to enable this further  
development.

6. Conclusions
The key basis of the financial mechanism to ensure 

the development of agricultural enterprises is financial 
resources, which can be formed by own, borrowed 
and gratuitous sources. It is proved that based on the 
considered features of the financial mechanism of 
agricultural enterprises, the main motivating problem 
is the rational use, accumulation and formation of 
financial resources in the process of economic activity, 
which is the basis of an effective financial policy. It 
is established that a balanced policy of formation, 
accumulation, transformation and distribution of 
financial resources of agricultural enterprises is crucial 
to ensure their competitive, financially sustainable 
functioning, capitalization and market success. The 
system of management of financial resources of 
agricultural enterprises must be aimed at ensuring the 
positive efficiency of the use of financial resources. 
Risk management of agricultural enterprise provides 
reduction of total amount of losses of enterprise, will 
promote its financial stability and effective develop-
ment in the future. The main purpose of agricultural 
enterprises financial resources management is to  
achieve financial sustainability – the formation of 
a system of managerial impacts on the financial 
sustainability of agricultural enterprises and the search 
for the most appropriate ways to ensure their successful 
functioning.

In the future, the system of managerial impacts 
on the financial stability of agricultural enterprises  
should consist of the following interrelated  
elements:
– supply and marketing policy (the choice of marke-
ting strategy and tactics throughout the supply 
of products to its implementation, monitoring 
operational information about the market, the 
transition to the direct supply of products, the creation 
of a sales network);
– financial policy, cash flow analysis, selection of 
strategies for attracting external resources (loans), 
management of accounts receivable and payable, 
development of accounting and tax policies;
– credit policy (determining the total amount and 
operation of borrowing); possible sources of funds, 
credit resources and guarantees are determined;

Table 3
Prospective financial resources of enterprises in agriculture

Type of economic activity

Interest rates on the loan
In national currency In foreign currency

total
in particular

total
in particular

overdraft
total excluding 

overdraft
overdraft

total excluding 
overdraft

Total 9,7 16,0 8,7 5,2 4,7 5,2
Agriculture, forestry and fisheries 13,4 16,9 12,7 5,7 - 5,7

Source: (Credit reduction program)



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– personnel policy (formation of ideology and 
principles of personnel work, planning, hiring,  
selection and dismissal of employees, organization 
of labor and personnel management, training and 
education of employees, implementation of incentive 
system for their activity, development of social 
partnership).

Agricultural enterprises need to develop financial 
policies that focus on:
– profit maximization;
– optimization of capital structure and ensuring its 
financial stability;
– achieving transparency of the financial and economic 
condition of enterprises for owners (participants, 
founders), investors, creditors;

– creation of an effective financial management 
mechanism.

Based on the above definitions of financial resources 
and taking into account the current paradigm of 
financial relations in the agricultural sector, it is  
believed that timely access to finance provides  
producers with the opportunity to invest in production, 
increase productivity and profitability. In the mature 
sectors of the economy, producers need more  
financial resources and further exploration of new  
tools available to the agricultural enterprise and 
advanced in its economic activities to generate 
profits, improve competitiveness, ensure 
sustainable development to ensure such further  
development.

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