Impact of Lending Direction on Commercial Banks Efficiency

This research is devoted to the assessment of the impact of lending direction on commercial banks efficiency, which makes it particularly relevant in the context of the existing lending development problems to small and medium-sized businesses in Russia. Within the framework of the study, the analysis of the features of lending to the SME segment was carried out, the concept of commercial bank efficiency and its determinants were defined, the tools for assessing the effectiveness of the bank were studied, and with the help of the developed model, the impact of the direction of lending on the commercial banks efficiency was assessed. According to the evaluation results of the model on the data of Russian banks for the period from 2010 to 2021, the negative impact of lending to SMEs on banks cost efficiency that invest in their technological development was revealed. At the same time, it was found that SMEs lending does not have a significant impact on banks that do not invest in their technological development or carry out them in a small amount. Thus, despite the identified prerequisites that in order to successfully work with the SME segment, banks need to modernize their internal processes to meet the specifics and needs of the segment, which affects the banks technological development, the risks of lending to the segment in Russia remain quite high and are exacerbated by the instability of the external economic environment, which together has a negative impact on the banks cost efficiency and causes the need for further work on overcoming barriers to the development of the segment and its financing instruments.