The purpose of the article is to theoretically substantiate microfinance as a specific form of providing short-term financial resources to agricultural production entities in a market economy and develop practical recommendations on modifying microfinancing mechanisms for small agribusiness, taking into account international best practices.

Research methods. The article uses the dialectical method of cognition and a systematic approach (the need for the formation of a unified microfinancing system for agricultural production entities taking into account Ukrainian specifics, which requires the creation of legislative, infrastructural and administrative conditions, is substantiated). The methods of systemic, factorial and comparative analysis were used (the effectiveness of providing financial support to small agricultural enterprises was evaluated), a set of statistical data processing methods and methods of graphical interpretation of these phenomena and processes (in identifying and assessing the main risks that banks and microfinance organizations face in their activities). The analysis of statistical data was carried out using the methods of grouping, comparison and generalization (when assessing the overall level of provision of small agricultural enterprises with microloans).

Research results. Theoretically substantiated and systematized the methodological foundations of the formation of a financing system for agricultural production entities and developed recommendations to improve its efficiency in the context of economic modernization.

Scientific novelty. The theoretical provisions of the microfinancing system of small agribusiness were further developed. It is established that the lack of financial services, primarily microloans, for small agribusiness, the inequality of access to them in megacities and small towns leads to increased territorial and economic imbalances, increases social risks. It is proved that the development of microfinance is an important condition for the development of small agribusiness and the growth of the quality of life of the rural population. The features of bank and non-bank lending to small agricultural enterprises are analyses and promising areas of lending for small agribusiness are identified. An assessment is made of the specifics of the functioning of the microfinancing mechanism of small agribusiness. Measures are proposed to form an effective system for financing small agribusiness, based on the improvement of bank lending and the development of microfinance technology as a promising area of lending to small agribusiness.

Practical significance is expressed in the possibility of applying the results of the article in the activities of regional administrations, associations of organizations providing financial services to small agribusiness, business unions, potential investors, including banks and other organizations involved in organizational and economic relations related to the development of financial support for small agribusiness. The governing bodies of microfinance sector organizations when choosing an external form of financial support and financial instruments can use the developed approaches of interaction between the state and microfinance sector entities.