THE INFLUENCE OF THE STRUCTURE OF THE LOAN PORTFOLIO ON THE EFFICIENCY OF THE BANK’S LENDING ACTIVITIES

Abstract

Despite the active introduction by commercial banks of new products based on the use of digital technologies, today the main source of banking income is the implementation of credit operations. That is why one of the main tasks facing bank management today is the effective management of its credit portfolio. Under the conditions of a high degree of uncertainty in the financial market, increased competition in the market of lending to small and medium-sized business entities as the main provider of credit services, the problem of managing bank lending to such business entities becomes particularly relevant. The experience of the developed countries of the world states that small and medium-sized businesses play an extremely important role in their national economies, the level of its development determines the economic development of the country, the saturation of the market with quality goods, the possibility of creating new jobs, that is, it provides solutions to many economic, social and other problems . That is why, for a long time, small and medium-sized businesses have become the dominant sector of the economy in terms of number and volume of production in the leading countries of the world. Remaining the main consumer of credit offers of commercial banks, the industry portfolio, which includes small and medium-sized businesses, is decisive both in terms of risks and profitability for creditors. Accordingly, the formation of this portfolio, as well as its management, is essential for a commercial bank. Lending for a commercial bank is the main type of its economic activity, which provides it with the main part of income and, accordingly, profit. It reflects the economic essence of banking itself and is one of the defining functions of a banking institution. Today, it is important for commercial banks to effectively control and manage the bank's credit activity, namely the evaluation of the credit portfolio, because credit activity brings the main profits to the banking institution. The main goal of managing the credit activity of a commercial bank is to increase its efficiency and reliability and to obtain a larger amount of profit on this basis. The main goal of managing the credit activity of a commercial bank is to increase its efficiency and reliability and to obtain a larger amount of profit on this basis.