TO THE QUESTION OF EVALUATING THE LOAN POSSIBILITY OF COMMERCIAL ORGANIZATIONS BY BANKS OF THE RUSSIAN FEDERATION
The theoretical aspects of the creditworthiness of commercial organizations are considered: the concept, the goals of the bank`s assessment, the evaluation criteria and indicators reflecting the financial condition of the borrower. The positive sides and shortcomings of methods used by banks to assess borrowers` creditworthiness - legal entities are identified. The interrelation and interdependence of the borrower`s creditworthiness and credit risk of the bank are reflected. Credit risk indicators of the Russian banking sector are analyzed. Directions for improving existing banking methods for assessing borrowers` creditworthiness - legal entities are formulated in order to more fully and comprehensively analyze the borrower`s ability to repay a loan in a timely manner.
Keywords: borrower creditworthiness, borrower credit history, bank credit risk, financial ratios, borrower reputation, reserve for possible losses on loans, credit history bureau, borrower cash flow.
Highlights:
assessment of borrowers` creditworthiness is the most important tool to reduce credit risks of banks, directly affects the financial stability of the bank and prospects for its functioning in the financial market;
the considered tool for minimizing credit risk is used by banks at all stages of the lending process. When issuing a loan, it is important to assess the creditworthiness of a potential borrower in order to make an informed decision on providing a loan and establish optimal lending conditions, taking into account the level of credit risk;
in the process of servicing a debt by a borrower, an assessment of his creditworthiness is necessary to determine the prospects for repaying a loan and to prevent loan defaults;
in domestic practice, the borrower`s creditworthiness is one of the important criteria for creating a reserve for possible losses on loans, since it determines the level of credit risk, and therefore the amount of provision in case of loan default.
Habib Z. Kurbanov, a leading specialist of RT-INFORM, Russian Technologies State Corporation, Moscow.