Credit as a source of financial support for the development of the city of Lviv (on the example of cooperation between the Lviv City Council and international financial organisations)
Students Name: Yushchyk Yurii Volodymyrovych
Qualification Level: master (ESP)
Speciality: Finance, Banking and Insurance
Institute: Institute of Economics and Management
Mode of Study: full
Academic Year: 2022-2023 н.р.
Language of Defence: ukrainian
Abstract: The work updates the topic of financing the development of the Lviv urban territorial community through the attraction of credit funds from international financial organizations. Thanks to the decentralization reform, local self-government bodies have gained more powers, but at the same time, the responsibility placed on them to ensure the well-being of the community has increased. In order to implement the city’s development strategy, the Lviv City Council carries out local borrowing and provides local guarantees to Lviv communal enterprises for the implementation of socially important projects with the funds of international financial partners. The largest international creditor of the city is the European Bank for Reconstruction and Development, and the largest grantor in terms of additional financing of credit projects is the E5P fund. Foreign borrowing is an important tool for ensuring the financing of the development strategy of the Lviv urban territorial community in conditions of a deficit of budget funds. The implementation of innovative projects is a priority for the successful development of the community. Local budgets, as an element of the budget system, are the leading link in the implementation of the country’s budget policy. In order for the community to be able to fulfill its tasks, it must have the appropriate amount of financial resources. [2] Investments in the city of Lviv by organizations such as the European Bank for Reconstruction and Development, the European Investment Bank, and the Northern Environmental Finance Corporation are a positive signal for other investors, including private ones. Active cooperation of the Lviv City Council with international organizations forms a positive investment image of the city in the international arena. Successful implementation by the city of projects financed with the help of credit funds transforms the structure and conditions of the local labor market, ensures the development of related industries and savings of budget funds, increases the level of revenues to the city budget. The object of the study is loans from international financial organizations as a source of financial support for the development of the city of Lviv. The subject of the study is the theoretical and practical aspects of managing the credit portfolio of the city of Lviv in crisis conditions for the successful implementation of projects financed by funds obtained through external loans. The purpose of this study is an analytical assessment of the costs of servicing and repaying the body of the city’s credit lines, analyzing the factors that influence the increase in costs related to loans, as well as the development of recommendations and theoretical provisions for the management of the city’s credit portfolio. The theoretical aspects of the local borrowing mechanism are revealed, the structure and dynamics of the budget of the Lviv City Territorial Community are analyzed, the trend of the budget indicators is analyzed and the reasons for their change are given. The credit portfolio of the city and expenses for servicing credit lines were studied. The relationship between expenditures and the level of unemployment and the exchange rate of the euro has been established. It has been proven that the growth of these factors affects the increase in expenses for the maintenance of credit lines. The structure and dynamics of expenses for servicing credit lines from the European Bank for Reconstruction and Development and the European Investment Bank are described and compared. Recommendations for optimizing the management of the city’s credit portfolio are given and their economic results are determined. Recommendations on increasing the amount of additional financing of credit projects with grant funds, raising the level of management of credit projects and attracting potential credit lines from the European Investment Bank were considered. Keywords – municipal loans, local debt, local guarantee, credit, debt service, borrowing, international financial organizations. List of used literature sources. 1. Pershko, L. O. (2020). Management of local budgets in conditions of financial decentralization. Economic Sciences, 2(4), 229–232. 2. Maksymchuk, O. (2019). Local borrowing as a source of capital expenditures of local budgets. World of Finance, 2(59), 98–108. 3. Benovska, L. (2020). Local borrowing as a tool for the development of territorial communities. World of Finance, 1(70), 49–60. 4. Vatamanyuk-Zelinska, U., & Macei, K. (2023). The financial and economic base of local budgets as a guarantee of stable regional development. Innovation Economy, 1(93), 71–78. 5. Semryaga, B.V., & Forkun, I.V. (2022). Utility credit and its forms. Financial aspects of the development of the economy of Ukraine: theory, methodology, practice, 128–130.