European Cooperation (Oct 2018)
CONDITION AND PERSPECTIVES OF FORMING A COMPLEX METHODOLOGY ASSESSING CREDITABILITY OF ECONOMIC ENTITIES
Abstract
The article analyzes the scientific approaches to the concept disclosure of the most well-known models for assessing the solvency of economic entities for their adaptation to domestic conditions. Despite a large number of well-documented and tested in practice techniques, the problem cannot be considered as fully disclosed, since a universal methodology for assessing borrowers' creditworthiness has not yet been developed in the theory and practice. The author's approach is based on the fact, that the notion of creditworthiness is a complex feature that reflects the essence of bank credit in a market economy, based on the balance of the opposing interests of the parties to a loan agreement – the borrower and commercial bank. Accordingly, the creditworthiness at the methodological level must be expressed through a set of interconnected quantitative and qualitative indicators, which in their unity determine the degree of creditworthiness of the potential borrower. It is promising to establish proper normative support in the country to determine the creditworthiness of potential borrowers and a system of reliability ratings of economic entities that would standardize the relevant procedures and minimize bank credit risks. In parallel, it is necessary to improve their own models for assessing the borrowers’ creditworthiness in order to create integral methods for determining the general indicator of credit on the basis of a complex of formalized and non-formalized assessment criteria. The system of such indicators should include indicators calculated on the basis of statistical data and characteristics of the potential borrower, which can be obtained on the basis of expert judgments.
