In recent decades, lending has become an integral part of the economic system of most countries. Bank, loans, mortgages - all these financial instruments are actively used by both businesses and individuals. Expert from the field of finance with experience of more than 20 years. YuliaShaikhrazeeva, a lecturer at Plekhanov Russian Economic University, shared her opinion with RusNews24.ru.
According to the expert, the main role of lending in the modern economy is to provide access to financial resources for both individuals and legal entities.
“Lending allows people to purchase goods and services that they cannot pay for immediately, i.e. lending helps stimulate consumer demand and improves the quality of life. One of the important features of economic dynamics has become stagnation of real incomes of the population (despite the labor shortage and growth of nominal wages), in many respects the growth of consumption is carried out exclusively at the expense of credit resources. The refusal of crediting will entail for the population the necessity to refuse from large purchases and the need for more rigid financial discipline”.
Lending offers short-term solutions, but it also creates long-term problems. Many economies face high levels of debt, which leads to financial instability. High interest rates and repayment obligations can stop businesses from growing and hinder economic growth. In conditions of credit dependence, entrepreneurs often prefer to wind down projects to avoid the risks associated with the inability to repay debt.”
Yulia Shaikhrazeeva explained that lending plays an important role for businesses in the modern economy, providing access to the necessary financial resources for various purposes. For example, credit resources allow companies to invest in expanding production, acquiring new technologies, developing new products and entering new markets. This promotes long-term growth and competitiveness, which in turn contributes to job creation and overall employment levels.
“Currently, according to the CBR data, the majority of enterprises have limited access to bank credit: it is used by practically all large enterprises, but only 35-40% of medium-sized enterprises, 25-30% of small and 5-10% of microenterprises. a. In fact, with the help of the key rate, the CBR operates, among other things, on the availability of credit resources for businesses and households. Given the sharp increase in the key rate, a significant rise in the cost of credit resources is expected, which may lead to a decrease in the overall volume of lending, for some companies with large amounts of debt, the current value of the key rate may lead to insolvency, and in the economy as a whole is expected to reduce the investment activity of companies and a possible decline in economic growth”.
Developing an economy without credit is a challenge that requires rethinking traditional financial models. The use of equity capital, private investment and government support creates opportunities for sustainable growth without debt. However, the realization of such models requires a deeper culture of financial literacy and the development of trusting relationships between all participants in economic processes. By adopting unconventional approaches, societies can not only avoid economic crises, but also create a more stable and equitable future.