Role of the financial sector in financing the enterprises of the real sector of the economy

Abstract

Introduction. Financial sector plays an important role in the financing of business entities in the real economy sector. A possibility of rising funds through the stock or banking sector enables substantially to expand the scope of enterprises.

However, the presence of permanent financial crises does not allow companies to use these opportunities in full. Therefore, the assessment of state and trends of the stock and banking sectors in the context of the use of their funds to finance companies in the real sector of the economy becomes important.

Purpose. The article aims to identify contemporary issues of development of the stock and banking sectors in the context of their ability to finance companies in the real economy.

Method. In order to achieve the goal of the research we have used the following methods: method of structural and dynamic analysis and method of economic and statistical analysis of the development of the stock and banking sectors of Ukraine.

Results. It has been determined that the deterioration of the stock market in Ukraine led to its exclusion from the list of marginal markets. The largest segment of the Ukrainian stock and banking sector services the issuers, which are owned by the state. At the same time, the financial sector has features of bank-centeredness since banks play a leading role in financing of companies and in transactions of the stock market.

Ukrainian stock market mainly carries out operations with government bonds and only a small part of operations provides financing for the activities of companies through the issue of stocks and bonds. The share of long-term sources of funding is gradually decreasing and it is critically low for economic growth of the country. The tempos of providing long-term and short-term bank loans for the company are slowing down. A positive trend is the reduction of interest rates on loans. There is a need to develop effective measures for using opportunities of the stock and banking sectors as well for financing companies in the real sector of the economy.