The Problem of Attracting Individuals in the State Loan Market in Ukraine

Abstract

The article is aimed at researching the domestic government loan bonds (OVDPs) market in Ukraine and the problems of attracting funds of individuals in this market. The deficit of Ukraine’s State budget necessitates additional funds to finance expenditures. The article substantiates the need to use domestic government bonds to cover the budget deficit. It is defined that for individuals OVDPs is a means of investing, preserving their own funds, and also increasing them. The article analyzes the level of involvement of individuals in the market of OVDPs. It is identified that the main buyers in the domestic government loan market are banking institutions and non-residents, while individuals do not have sufficient knowledge about the possibility of investing into debt securities. A number of advantages and disadvantages of government bonds compared to deposits is defined. The factors preventing the free entry of individuals into the government bond market are considered, and actions are proposed to popularize the OVDPs among individuals in Ukraine. The authors of the article consider the successful foreign experience of attracting individuals in the market of OVDPs, and its example suggested ways to attract the population in the market of OVDPs. It is concluded that on the part of the State the OVDPs is a significant source of funding for the State budget expenditures. It is specified that the priority for the Ukrainian government is to attract funds of individuals in the market of OVDPs, which would allow to expand the capacity of the State budget to increase the level of socio-economic development of the country. Prospect for further research in this direction is to consider increasing the attractiveness of government bonds to attract the funds of individuals.

Keywords

• government securities
• domestic government loan bonds
• budget deficit
• investment instrument
• debt securities
• financing of the state budget