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The article reveals the problem of assessing the creditworthiness of a corporate borrower, which is becoming more relevant every day due to the worsening economic situation and tightening requirements for risk taking. The risk of loan default in Russian banks leads to an increase in lost profits of the bank. The way out of this situation is a more detailed approach of credit institutions to assessing the client’s creditworthiness. The advantages of the existing credit assessment system in Russia are determined and an analysis of existing shortcomings is carried out. A comparative analysis of methods for assessing the borrower's creditworthiness in different countries is provided and a method for improving Russian methods for assessing the borrower's creditworthiness is proposed. The author believes that a way to improve creditworthiness assessment would be to create a unified methodology for assessing the creditworthiness of a corporate client.

creditworthiness

commercial Bank

credit rating

1. Bondarenko T.N., Savvateeva O.P. Improving the assessment of the borrower's creditworthiness as an element of credit risk management // In the collection: Global transformation of national market systems in the course of the formation of the knowledge economy, materials of the international scientific and practical conference: in 2 parts. Khabarovsk State Academy of Economics and Law. – 2013. – P. 279–283.

2. Kornienko K.A., Samsonova I.A. The influence of the development of the financial environment on the “prosperity” of business in the region // Modern problems of science and education. – 2014. – No. 4. – P. 392.

3. Shagunova M.A., Krivoshapova S.V. The role of intrabank control in the activities of a commercial bank // Modern problems of science and education. – 2015. – No. 1-2. – P. 7.

4. Kopylova G.A., Konvisarova E.V. Analysis of services of Sberbank of Russia for deposits of individuals // Territory of new opportunities. Bulletin of Vladivostok State University of Economics and Service. – 2015. – No. 2 (29). – pp. 22–30.

5. Kuchiev A.Z., Kuchieva I.Kh. Organization and methods for assessing the creditworthiness of corporate clients // Terra Economicus – 2013. – No. 3. – P. 65–69.

6. Matchina E.M., Shironina E.M. Improving the banking system of lending to legal entities // Modern problems of science and education. – 2012. – No. 3.

7. Makovetsky M.Yu. Methods for assessing the borrower's creditworthiness // News of the Penza State Pedagogical University named after. V.G. Belinsky. – 2008. – No. 11.

8. Kemaeva S.A., Kozlova E.E., Ionova E.S. Information and analytical support for assessing the creditworthiness of small business organizations // Economic analysis: theory and practice. – 2014. – No. 7.

9. Shatalova E.P. Assessing the borrower's creditworthiness in banking risk management: textbook. allowance. – M.: KnoRus, 2011.

An effective banking system with a broad clientele can and should help mobilize domestic savings. In this regard, flexible banking services that can respond to the emerging needs of a changing economy are of particular importance.

Lending to corporate clients of banks is developing at a very fast pace, and the banking sector faces a number of problems. The most important of them is to prevent unjustified loan investments, ensure timely and full repayment of loans, and reduce the risk of non-payment.

The solution to this problem is a high-quality and effective assessment of the client’s creditworthiness. However, the lending activities of Russian banks are marked by the lack of a proven organization and methodology for assessing the creditworthiness of clients in most of them. Research in the field of creditworthiness assessment will make it possible to formalize the methodology for assessing it by banks, reduce credit risk and ultimately improve the quality of the loan portfolio.

Methodological aspects of assessing the creditworthiness of corporate clients were studied by such scientists as: Yu.A. Kolyadyuk, R.I. Ivanenko, L.V. Baraban, T.N. Bondarenko, O.P. Savateeva, K.A. Kornienko, I.A. Samsonova, M.A. Shagunova, S.V. Krivoshapova, G.A. Kopylov and other authors. The vast majority of the works of these authors relate to the general assessment of financial companies as borrowers.

The main criterion for a borrower’s creditworthiness is its financial condition, the assessment of which is determined during the analysis process:

1) financial results (profit, losses);

2) liquidity and solvency of the enterprise;

3) market position (business activity, competitiveness, stable dynamics of the market position);

4) cash flow movements and forecast of their development and changes in direction throughout the entire term of the loan agreement.

Currently, there is no single standardized credit assessment system in the world. Therefore, banks use various methods to analyze the borrower’s creditworthiness. The reasons for this diversity are:

Different degrees of confidence in quantitative (measurable) and qualitative (difficult to measure, with a high degree of acceptability) methods for assessing creditworthiness factors;

Using a specific set of tools to minimize credit risk, accompanied by close attention to individual tools;

A variety of factors influencing the level of creditworthiness, which leads to the fact that banks pay different attention to them when assigning a credit rating. Previously, the information and analytical support necessary for an up-to-date assessment of the creditworthiness of potential borrowers was considered in sufficient detail. The most significant, according to the authors, factors influencing the assessment of creditworthiness are presented in table. 1;

The outcome of assessing a borrower's creditworthiness takes various forms. Some banks stop at simply calculating financial ratios, others assign credit ratings and calculate the level of credit risk.

Additional requirements of the Bank of Russia also include analysis and forecast of the borrower's cash flow, planning of sales and profit, analysis of the business plan and feasibility study (feasibility study) of the loan. A relatively recent attempt has been to get acquainted with the borrower's credit history through the Credit History Bureau and assign a credit rating to borrowers.

The result of the analysis of the borrower’s financial condition is its assignment to one of the financial condition groups: good, average and bad.

Below in the table. Table 2 presents the main characteristics of groups of borrowers of a commercial bank according to their financial condition.

Table 1

Factors affecting creditworthiness

Financial condition at the time of receiving the loan	Calculation of financial ratios that determine liquidity, solvency, etc.
Economic possibilities of loan repayment	Availability of sellable assets, ability to attract additional funds (credits from other banks, loans, issue of debt securities, issue of shares)
Legal terms	Legal capacity, capacity, legal risks
Borrower's intentions repay the loan	Reputation, integrity, credit history, management
Loan collateral	Pledge, guarantees, sureties, insurance
Probability of default	Using Bankruptcy Forecasting Models
Competitive position	Duration of activity, products, market share, production stability, competitors
Management	Strategy, experience, planning and controls, reliability
Environment	Economic, political, technical, legal, external
Industry Analysis	Barriers to entry, opportunities for buyers and suppliers
Strategy	Commodity, marketing, production, financial, scientific research
Reality assessment activities	The organization does not have its own or leased fixed assets, the enterprise systematically withdraws large amounts of cash from its bank accounts in the amount of 80% or more in relation to the turnover on these accounts, the implementation of confusing, economically impractical transactions, the implementation of transactions by proxy by persons who are not employees organization, absence of employees other than management, frequent change of place of tax registration, performance by a person of the duties of a manager in several organizations, registration of an enterprise at the place of mass registration, implementation of trust management of the activities of an enterprise by a legal entity at the stage of liquidation, absence or insignificant size tax payments

table 2

Main characteristics of groups of commercial bank borrowers by financial condition.

Financial condition	Characteristics of borrower groups
	stability of production, positive net assets, profitability and solvency, absence of any negative phenomena (trends) that could affect the financial stability of the borrower in the future
	absence of direct threats to the current financial situation in the presence of negative phenomena in the borrower’s activities, which in the foreseeable future may lead to financial difficulties
	the borrower is declared insolvent (bankrupt) or he is persistently insolvent or there are negative events, the likely result of which may be the persistent insolvency of the borrower

Table 3

Advantages and disadvantages of assessing the creditworthiness of borrowers

	Characteristic	Advantages	Flaws
Coefficient method for assessing the creditworthiness of borrowers	The coefficient methods used by banks for assessing creditworthiness are different, but, as a rule, they contain a certain system of indicators, such as: Liquidity ratios; Turnover ratios; Financial leverage ratios; Profitability ratios; Financial stability ratios; Debt service ratios, etc. Ratio methods include the method for determining a client’s creditworthiness class, proposed by Sberbank of Russia in 1998.	High speed of obtaining conclusions about the borrower’s creditworthiness class due to the calculation of a small set of indicators x	A study of similar methods in large Russian banks showed that they lack the main indicator characterizing solvency, which is the only one that has regulatory significance in accordance with Federal Law No. 127-FZ of October 26, 2002 “On Insolvency (Bankruptcy).” The type of economic activity is usually not taken into account
Statistical method for assessing the creditworthiness of borrowers (or risk assessment methods)	The purpose of these methods is to develop standard approaches for objective characteristics of the borrower, determining numerical criteria for dividing future clients, based on the information they provide, into reliable and unreliable. An example is the Zeta model, developed by a group of American economists in the late 1970s. The value of the key parameter Z is determined using an equation whose variables reflect the characteristics of the analyzed company: its liquidity, the rate of capital turnover. These methods are most widely used in predicting the probability of bankruptcy	High speed of obtaining conclusions about the borrower’s creditworthiness class due to the calculation of a small set of indicators (as a rule, the statistical model includes only 2-5 coefficients). For the calculation, the data presented in the accounting (financial) statements is sufficient.	These methods are rarely used in Russian practice due to the lack of high-quality statistical models that take into account the specifics of different types of economic activity and the scale of business. They are characterized by a low degree of reliability of the analysis results
Comprehensive analytical approach to assessing the creditworthiness of borrowers	The main source of information when analyzing a potential borrower is its financial statements. In addition, credit experts may require a forecast of income and expenses for a year or more, information on receivables and payables. The profitability of the enterprise, profits and losses, and the ratio of financial stability indicators are also assessed.	Obtaining the most reliable data on the financial position of the borrowing organization	High labor intensity of assessment procedures. The problem with obtaining information when working with small businesses
Credit assessment based on cash flow analysis	Activity ratios are determined based on data on liquid assets turnover, inventories and short-term debt obligations based on the balance of cash flows	Increasing the reliability of creditworthiness analysis, since cash flow determines the company’s ability to cover its expenses and repay debt with its own funds	High labor intensity of the method, lack of information about the cash flows of a small business entity
Credit assessment based on business risk analysis	Business risk is associated with the possibility of not effectively completing the circulation of the organization’s property. The principle of going concern of an organization is a basic requirement for sustainable development, therefore risk assessment should be carried out by both the organization and the credit expert when assessing creditworthiness	Business risk analysis allows us to predict the sufficiency of loan repayment sources. This approach complements methods for assessing the creditworthiness of bank clients	The problem of accessibility to the borrower’s internal information when assessing internal risks in the organization’s activities
Predictive assessment of creditworthiness	When determining the borrower's creditworthiness, banks strive to assess not only the current, but also the future solvency of the enterprise. The following techniques can be used for this: Calculation of the creditworthiness index; Using a system of formalized and informal criteria; Forecasting solvency indicators	Allows you to take into account not only accounting and reporting data, but also additional information (for example, persistently low liquidity ratios, deterioration of relations with banking institutions, insufficient diversification of activities or loss of key contracts, etc.)	Any predictive decision is subjective, and the calculated values ​​of the criteria are more likely to be additional information. Forecasting models are widely used in foreign practice (bankruptcy forecasting models). In Russia their use is limited

Analysis of methods for assessing the creditworthiness of clients in Russia allows us to identify their main groups and determine their advantages and disadvantages. In table 3 presents methods for assessing creditworthiness.

In practice, the methodology for assessing creditworthiness, as a rule, combines several methods, generalizing them into the author’s methodology for assessing the creditworthiness of clients.

The main methods for assessing the creditworthiness of bank client enterprises, which can provide complete and audited financial statements, various operational accounting data can serve as:

1) method of financial ratios;

2) cash flow analysis method;

3) method of business risk analysis.

The method of assessing a borrower’s creditworthiness based on an analysis of financial indicators is quite common in Russian banking practice. This method is based on the financial statements of the enterprise for several reporting dates and allows you to assess the borrower’s creditworthiness according to a number of financial indicators, which include the following 5 groups of indicators: liquidity ratios, efficiency and turnover ratios, financial stability ratios, profitability ratios, debt service ratios.

Table 4

Elements of assessing borrowers from US, French, and Russian banks

Elements of assessment
Information sources:
Constituent documents, charter;
Sources of external information, bureau;
Technical documentation
Audit reports
Marketing information
Financial reports and accounting data;
Forecast financial information data (business plan, budget, feasibility study)
Evaluation indicators:
Liquidity of the organization;
Capital turnover;
Involved funds;
Profitability indicators;
Availability of uniform standards
Analysis of potential sources of loan repayment:
Analysis of loan collateral;
Enterprise profit analysis;
Sufficient volume of salable assets

The creditworthiness indicators included in each of these groups can be very diverse; they are presented in the works of M.Yu. Makovetsky.

1. Liquidity ratios characterize the ability of an enterprise to quickly release from economic circulation the funds necessary for normal financial and economic activities and the repayment of its obligations.

2. Turnover ratios characterize the efficiency of use of funds, i.e. the rate of transition of inventories into finished products, and then into monetary form. They complement liquidity indicators.

3. Financial stability ratios characterize the degree to which the borrower is provided with equity capital and allow one to assess the size of equity capital, as well as the degree of dependence of the client on borrowed funds. The greater the borrower’s dependence on attracted sources, the lower the level of his financial stability and, consequently, his creditworthiness.

4. Profitability ratios characterize the level of profitability and profitability, showing the efficiency of using all capital, both own and borrowed.

5. Debt service ratios show that part of the profit that is used to pay off interest and fixed payments. Thus, the set of financial ratios allows us to characterize the financial condition of the borrower.

The methods of foreign banks for assessing creditworthiness largely correspond to the methods used by Russian banks. The main elements of assessing borrowers in Russia, France and the USA are presented in table. 4.

Comparing the elements used to assess the creditworthiness of a corporate client in Russia and abroad, one can see that, in general, similar assessment tools are used. In both cases, the tools are used to form the author’s methodology for assessing the financial position of a legal entity. The differences in assessing creditworthiness include the fact that Russian banks do not resort to the requirements of technical documentation from their clients when assessing creditworthiness, they also do not turn to private audit reports when conducting their analysis and forming their own conclusions, and they are also not guided by marketing information. These differences make it possible to reduce the time required to quickly assess the borrower's creditworthiness in the case of Russian practice, but the lack of use of these tools implies that the analysis must be carried out more carefully based on the available data and must fully reflect all aspects of the financial position of the legal entity.

It is noteworthy that in recent years Russian banks have been more focused on the underwriting principle of analysis rather than using a scoring system; this fact erases another difference between Russian and foreign practices when a bank works with clients. Several years ago, most banks provided loans using a scoring system. During the crisis, such banks showed the highest number of overdue loans. The technique turned out to be ineffective. Now credit institutions consider the creditworthiness of potential borrowers, analyzing all possible internal and external factors affecting business development. Therefore, the transition to a unified methodology for assessing creditworthiness by banks is very important for targeted financing of this segment in Russia.

Bibliographic link

Shvidky A.I., Miroshnichenko A.A. METHODS FOR ASSESSING THE CREDITABILITY OF CORPORATE CLIENTS OF A COMMERCIAL BANK: RUSSIAN AND FOREIGN EXPERIENCE // International Journal of Applied and Fundamental Research. – 2016. – No. 7-4. – P. 667-672;
URL: https://applied-research.ru/ru/article/view?id=9898 (access date: 01/04/2020). We bring to your attention magazines published by the publishing house "Academy of Natural Sciences"

Assessment of the creditworthiness of bank clients. The concept of a client's creditworthiness Methods of assessment and methods for calculating indicators of a client's creditworthiness The concept of a client's creditworthiness Bank's credit operations are accompanied by numerous and varied risk factors that can lead to non-repayment of the loan and loss of both borrowed and the bank's own funds. To prevent such situations, the bank must ensure the creditworthiness of the potential borrower. The task of assessing the client's creditworthiness...

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Topic 10. Assessment of the creditworthiness of bank clients.

1. Methods of assessment and methodology for calculating client creditworthiness indicators

1. Concept of customer creditworthiness

Bank credit operations are accompanied by numerous and varied risk factors that can lead to non-repayment of the loan and loss of both borrowed and the bank’s own funds. To prevent such situations, the bank must ensure the creditworthiness of the potential borrower.

The debtor's creditworthiness refers to his ability to fully and on time fulfill his obligations under the loan agreement.

The task of assessing a client's creditworthiness is to determine the degree of risk that the bank is willing to assume when issuing a loan.

The purpose of assessing potential risk is to make a decision on whether to issue a loan to a given client. The conditions under which a loan can be provided are also determined by an analysis of the borrower’s creditworthiness, an assessment of his financial situation, both in the present and taking into account future trends.

At the initial stage of organizing the lending process, the bank examines the documents submitted by the borrower to obtain a loan from the point of view of his legal capacity.

Creditworthiness assessment occurs not only at the stage of issuing a loan. It accompanies the entire credit process and is a mandatory element of credit monitoring.

Creditworthiness analysis involves the study of economic indicators, as well as other information reflecting the market position of the borrower, the competitiveness of its products and prospects.

To assess creditworthiness, the client’s credit history is important, to study which banks use information received from the Credit Bureau. “Credit Bureau” is an automated information system for receiving, generating, processing, storing and providing the National Bank with information on the execution of loan agreements. To accumulate information about their clients, all banks are required to provide the Credit Bureau with information on the execution of all loan agreements, regardless of the loan amount.

The creditworthiness assessment and a positive conclusion on the borrower’s loan application are the basis for making a decision to issue a loan.

2. Methods of assessment and methodology for calculating client creditworthiness indicators

Each bank determines its own methodology for calculating creditworthiness. Banks are required to form their own system for assessing the financial condition of the debtor using approaches used in domestic and international banking practice. The applied methods and approaches for assessing creditworthiness and solvency are reflected in the bank’s local regulatory legal acts. The most convenient option for a bank is when it has various methods for assessing creditworthiness for the main groups of borrowers, including individuals applying for a consumer loan.

The assessment of creditworthiness can occur using the results of credit scoring, which is understood as a mathematical or statistical assessment model, which is usually used when considering the creditworthiness of individuals.

Sources of information for conducting a creditworthiness analysis are financial reporting forms, transcripts of individual balance sheet items and documents confirming the fulfillment of conditions for previously received loans. The bank has the right to use other available sources of information about the borrower, including those received from third parties.

Traditionally, the creditworthiness calculation scheme includes two stages:

Stage 1 - assessment of the economic situation of the enterprise on the basis of financial indicators accepted by the bank that have regulatory significance;

Stage 2 - additional assessment of creditworthiness based on qualitative indicators of financial statements and other information. Analysis of the enterprise’s activities based on qualitative parameters allows us to calculate the final class of its creditworthiness.

The basis for determining the creditworthiness of the borrower at both stages is an analysis of its financial and economic condition according to external financial statements for at least a year. The structure of such an analysis usually consists of five main blocks:

composition and structure of the balance sheet;

financial stability of the enterprise;

the liquidity of its assets and solvency;

business activity;

profitability.

In banking practice, the following methods are usually used to study the client’s financial condition based on its balance sheet: analysis of absolute indicators, vertical and horizontal analysis, calculation of relative indicators or ratios. The last method is the most common; on its basis, banks carry out rating assessments of creditworthiness.

Below is a list of the main relative indicators that are used by many banks to analyze the financial and economic condition of borrowers.

The coefficient of provision with own working capital is calculated as the ratio of the enterprise’s own working capital to the total value of current assets, i.e. the total of section III of the liability balance sheet and line 640 “Reserves for future expenses” minus the total of section I of the asset balance sheet refers to the total of section II of the asset balance sheet. Characterizes the presence of the enterprise's own working capital and is the main criterion for determining the insolvency of the enterprise. The standard value varies depending on the industry and is at least 0.1.

Current liquidity ratio (coverage) - calculated as the ratio of current assets to short-term liabilities, i.e. the ratio of the total of section II of the assets of the balance sheet to the total of section V of the liabilities of the balance sheet minus line 640 “Reserves for future expenses”. The ratio shows the sufficiency of working capital that can be used to pay off short-term liabilities of the enterprise. Traditionally, the minimum acceptable value is not lower than 1, otherwise the borrower is assessed as uncreditworthy. The optimal value is 1.7. Industry specific features have regulatory significance.

Absolute (quick) liquidity ratio - calculated as the ratio of the most liquid assets to short-term liabilities, i.e. the amount of cash (line 260 of the balance sheet) and short-term financial investments (from line 270 of the balance sheet) to the total of section V of the liabilities side of the balance sheet: minus line 640 “Reserves for future expenses.” The value must be at least 0.2; a lower value indicates a decline in the solvency of the enterprise.

Autonomy (financial independence) coefficient - calculated as the ratio of equity capital to the value of the enterprise’s property or to the balance sheet total, i.e. the sum of the total of Section III of the balance sheet liabilities and line 640 “Reserves for future expenses” to the total of the balance sheet currency. The minimum value is kept at the level of 0.5, its excess is a sign of increasing financial independence of the enterprise, expanding the ability to attract funds from outside.

Financial stability coefficient - calculated as the ratio of constant capital to the value of the enterprise’s property, i.e. the amounts of III and IV sections of liabilities and line 640 “Reserves for future expenses” to the balance sheet currency total. The minimum value corresponds to 0.5. This indicator allows you to assess the stability of the enterprise's resource base.

The ratio of security of financial obligations with assets (attraction) characterizes the ability of an enterprise to fulfill its financial obligations, defined as the ratio of all long- and short-term obligations to the total value of property, i.e. the sum of the totals of sections IV and V of the liabilities side of the balance sheet minus line 640 “Reserves for future expenses” to the total amount of the balance sheet currency. The standard value for the indicator is below 0.85.

The coefficient of the ratio of borrowed and equity funds of an enterprise (financial leverage) is the ratio of the sum of the totals of IV and V sections of the liabilities side of the balance sheet minus line 640 “Reserves for future expenses” to the sum of the totals of section III of the liabilities side of the balance sheet and line 640 “Reserves for future expenses”. The value within the normal range is less than 0.7. Its excess indicates a high dependence of the enterprise on external sources and means a loss of financial stability.

The agility coefficient is defined as the ratio of own working capital to the total equity capital of the enterprise. A value in the range of 0.2-0.5 is considered normal. The closer the indicator value is to the upper limit, the more opportunities the enterprise has for financial maneuver.

In addition to the above coefficients, to assess creditworthiness, indicators of turnover of working capital, credited assets, accounts receivable and payable, goods shipped, as well as other indicators at the discretion of the bank are important.

Assessment of creditworthiness based on qualitative analysis is both a continuation and a necessary component of the quantitative analysis of the financial statements of an enterprise. Includes an analysis of the possibility and conditions of loan repayment, methods of ensuring loan repayment and other areas.

Assessing the applicant's creditworthiness according to the methodology adopted by the bank can be accompanied by determining the rating of borrowers, which allows standardizing approaches to clients in assessing credit risk when concluding a loan agreement and structuring its terms, in the process of credit monitoring.

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In order to assess the borrower's creditworthiness, commercial banks use almost all the information available to them in all areas of the financial and economic activities of enterprises. Issues of assessing the financial position of the borrower are resolved by each bank independently; they are reflected in the bank’s internal documents, in the methods and recommendations created. In the course of the bank's activities, methodological materials undergo certain transformations and are improved for the greatest adaptation to both external and internal conditions. Despite the fact that any improvement leads to simplification or complication of methodological material, the ultimate goal is to optimize the methods in terms of practical application.

The diversity of borrowers and their division into groups in each bank is individual, the principle of objective necessity applies here, it is impossible to analyze the financial condition of: banks, including non-resident banks, non-bank credit organizations using a single method; insurance companies; constituent entities of the Russian Federation, local authorities; individuals, entrepreneurs without forming a legal entity; small businesses using a simplified taxation system; legal entities (not belonging to the above groups).

The assessment of the creditworthiness of these borrowers is based on actual data from the balance sheet, profit statement, loan application, information about the history of the client and his managers. A system of financial ratios, cash flow analysis, business risk and management are used as methods for assessing creditworthiness.

In global and Russian banking practice, various financial ratios are used to assess the creditworthiness of a borrower. Their choice is determined by the characteristics of the bank’s clientele, possible causes of financial difficulties, and the bank’s credit policy.

I. Methodology for assessing the financial condition of borrowers - legal entities.

This Methodology is used to assess the financial condition of clients who are legal entities, excluding credit and insurance organizations, when performing transactions with which the Bank assumes credit and other risks.

The reliable financial position of the borrower is the basis for the payment and creditworthiness of the borrower, i.e. ability to timely satisfy payment requirements in accordance with business contracts, repay loans and interest, pay wages to employees, make payments and taxes to the budget.

In this regard, an assessment of the financial condition of borrowers is carried out in order to determine the feasibility of issuing a loan and the conditions for its provision, making a decision on loan restructuring (i.e. changing the main conditions for granting a loan), assessing the risks taken by the Bank for each loan provided and the quality of the Bank’s loan portfolio generally. The assessment of financial condition is carried out in several stages:

table 2

The core of the methodology is an express analysis of the financial condition of the borrower - a legal entity using rating values, which allows you to classify borrowers according to the quality of their financial position and, accordingly, the level of risk of the Bank's relationship with them (stage 1).

The rating assessment of an enterprise, if necessary, can be supplemented by an analysis of other indicators and additional information that confirm or correct the results of the express analysis rating assessment and the reasons for changes in the solvency of enterprises (stage 2).

When conducting an extended analysis at the 3rd and final stage, the borrower's rating, obtained through express analysis, is adjusted based on additional analysis data. After which a final conclusion about the financial position of the borrower is drawn.

The result of the assessment using this method is a conclusion about the quality of the borrower’s financial position: good, average (satisfactory) or bad (unsatisfactory) financial position. The methodology for assessing the financial condition of an enterprise is based on conducting quantitative and qualitative risk analysis.

Quantitative risk analysis involves assessing the following risk groups and financial ratios characterizing them:

· risk of illiquidity of enterprise assets (liquidity ratios),

· the risk of reducing the financial stability of the enterprise (ratio of equity and borrowed funds, equity ratio),

· risk of low profitability of activities (profitability ratios),

· risk of decline in business activity (receivables turnover ratio, inventory turnover ratio, accounts payable turnover ratio)

Qualitative risk analysis considers information that cannot be expressed in quantitative terms. To carry out such an analysis, information provided by the borrower is used, as well as information from information databases and the media (adjusted for the likelihood of their reliability).

At the time of consideration of the issue of issuing a loan to a newly formed legal entity, the financial position of the borrower is considered “average” due to the absence of direct threats to its current financial position.

The quality of the financial position corresponds to the class of the borrower according to the level of risk of the Bank’s relationship with them:

- first class- reliable clients with a good financial position, whose lending is not in doubt,

- second class - unstable borrowers with a satisfactory (average) financial position, lending to which requires a balanced approach;

- third class - dubious borrowers who have an unsatisfactory (bad) financial position, lending to which is associated with increased risk. The question of the advisability of lending to class 3 clients requires a cautious approach. When lending to such borrowers, increased attention should be paid to the issues of monitoring the quality of debt servicing, adequacy, liquidity and possible timing of the implementation of collateral for the borrower’s obligations.

II. Methodology for determining the borrower's creditworthiness in accordance with the "Regulations for the provision of loans to legal entities."

To determine the Borrower's creditworthiness, quantitative (assessment of financial condition) and qualitative risk analysis is carried out.

The purpose of conducting a risk analysis is to determine the possibility, size and conditions of providing a loan.

1. Assessment of the Borrower’s financial condition.

The assessment of the Borrower's financial condition is made taking into account trends in changes in the financial condition and factors influencing these changes.

For this purpose, it is necessary to analyze the dynamics of estimated indicators, the structure of balance sheet items, the quality of assets, and the main directions of the economic and financial policy of the enterprise.

When calculating indicators (coefficients), it is used precautionary principle, that is, recalculation of balance sheet asset items downwards based on expert assessment.

1.1. To assess the financial condition of the Borrower, three groups of assessment indicators are used:

liquidity ratios;

equity ratio;

turnover and profitability indicators.

I. Liquidity ratios.

They allow you to analyze the company’s ability to meet its current obligations. As a result of the calculation, the degree of provision of the enterprise with working capital for settlements with creditors for current operations is established.

Absolute liquidity ratio K1 is the most stringent criterion for the liquidity of an enterprise and shows what part of short-term debt obligations (the total of section Y of the balance sheet minus lines 640 - “deferred income”, 650 - “reserves for future expenses”) can, if necessary, be repaid from available funds, funds for deposit accounts and highly liquid short-term securities, while only government securities, securities of Sberbank of Russia and funds in deposit accounts are taken into account.

Intermediate coverage ratio (quick liquidity ratio) K2 characterizes the ability of an enterprise to quickly release funds from economic circulation and repay debt obligations. K2 is defined as the ratio:

To calculate this ratio, the groups of items “short-term financial investments” and “accounts receivable (payments for which are expected within 12 months after the reporting date)” are first assessed. These items are reduced by the amount of financial investments in illiquid corporate securities and insolvent enterprises and the amount of bad receivables, respectively.

Current ratio (total coverage ratio) K3 gives a general assessment of the liquidity of the enterprise, the calculation of which includes in the numerator all current assets, including tangible ones (the result of section II of the balance sheet).

To calculate K3, the already mentioned groups of balance sheet items are first adjusted, as well as “accounts receivable (payments for which are expected in more than 12 months)”, “inventories” and “other current assets” for the amount of, respectively, bad receivables, illiquid and hard-to-sell inventories.

II. Own funds availability ratio K4

Shows the share of the enterprise’s own funds in the total amount of the enterprise’s funds and is defined as the ratio of the enterprise’s own funds (the total of section III of the balance sheet, increased by the amount of the term 640 “deferred income” and 650 - “reserves for future expenses”) to the total amount of the enterprise’s funds (p. 700 ).

III. Turnover and profitability indicators

The turnover of various elements of current assets and accounts payable is calculated in days based on the volume of daily sales (one-day sales revenue).

Daily sales volume is calculated by dividing sales revenue by the number of days in the period (90, 180, 270 or 360). Average (per period) values ​​of current assets and accounts payable are calculated as the sum of half the values ​​at the start and end dates of the period and full values ​​for intermediate dates, divided by the number of terms reduced by 1.

Turnover of current assets:

Accounts receivable turnover:

Inventory turnover:

Similarly, if necessary, turnover indicators for other elements of current assets (finished products, work in progress, raw materials and supplies) and accounts payable can be calculated.

Profitability indicators are determined as percentages or shares.

Product profitability (or return on sales) K5:

Profitability of the enterprise K6:

Return on investment in the enterprise:

1.2. The main evaluation indicators are the coefficients K1, K2, K3, K4, K5 and K6. Other indicators of turnover and profitability are used for general characteristics and are considered as additional to the first six indicators.

Evaluation of the results of calculations of six coefficients consists of assigning a category to the Borrower for each of these indicators based on comparison of the obtained values ​​with the established sufficient ones. Next, the sum of points for these indicators is determined in accordance with their weights.

Sufficient indicator values:

K4 - 0.4 - for all Borrowers, except trade enterprises

0.25 - for trade enterprises

Breakdown of indicators into categories depending on their actual values ​​(Table 10).

Table 10. Breakdown of indicators into categories

The next step is to calculate the amount of points (Table 11).

Table 11. Calculation of the sum of points:

The formula for calculating the sum of points S is:

The S value, along with other factors, is used to determine the Borrower's rating.

For the remaining indicators of the third group (turnover and profitability), optimal or critical values ​​are not established due to the high dependence of these values ​​on the specifics of the enterprise, industry and other specific conditions.

Evaluation of the calculation results of these indicators is based mainly on a comparison of their values ​​over time.

1. Qualitative analysis is based on the use of information that cannot be expressed in quantitative terms. To conduct this analysis, information provided by the Borrower, the security department, and database information are used.

At this stage the risks are assessed:

– industry(state of the market by industry; trends in the development of competition; level of government support; significance of the enterprise on a regional scale; risk of unfair competition from other banks);

– joint stock(risk of redistribution of share capital; consistency of positions of major shareholders);

– regulation of enterprise activities(subordination (external financial structure); formal and informal regulation of activities; licensing of activities; benefits and risks of their cancellation; risks of fines and sanctions; enforcement risks (possibility of changes in the legislative and regulatory framework));

– production and management(technological level of production; risks of supply infrastructure (changes in supplier prices, disruption of supplies, etc.); risks associated with banks in which accounts are opened; business reputation (accuracy in fulfilling obligations, credit history, participation in large projects, quality goods and services, etc.); quality of management (qualification, stability of management position, adaptability to new management methods and technologies, influence in business and financial circles)).

3. The final stage Credit rating is the determination of the Borrower's rating, or class.

There are 3 classes of borrowers:

first-class - the lending of which is not in doubt;

second class - lending requires a balanced approach;

third class - lending is associated with increased risk.

1 class creditworthiness: S = 1.25 or less. A prerequisite for classifying the Borrower into this class is the value of the K5 coefficient at the level established for the 1st class of creditworthiness.

2nd grade creditworthiness: the value of S is in the range from 1.25 (not inclusive) to 2.35 (inclusive). A prerequisite for classifying the Borrower into this class is the value of the K5 coefficient at a level established not lower than for the 2nd class of creditworthiness.

Creditworthiness class 3: S value is greater than 2.35.

Further, the preliminary rating determined in this way is adjusted taking into account other indicators of the third group and the qualitative assessment of the Borrower. If these factors have a negative impact, the rating may be reduced by one class.

graduate work

1.2 Modern methods for assessing a borrower’s creditworthiness

The borrower's creditworthiness depends on many factors, each of which is not easy to assess and calculate. Most of the creditworthiness indicators analyzed in practice are based on data for the past period or at some reporting date, however, they are all subject to the distorting influence of inflation. It is difficult to identify and quantify certain factors, such as the moral character and reputation of the borrower. In addition, many methods and approaches are used to solve this problem, which do not exclude each other, but complement each other and make the assessment of the borrower’s creditworthiness more consistent with reality.

Let's consider the classification of approaches to assessing the creditworthiness of commercial bank borrowers, proposed by Professor I.V. Vishnyakov On methods for assessing the borrower’s creditworthiness [Text] / I.I. Kazakova // Money and Credit. - 2007. - No. 6 (Table 1).

According to this classification, approaches to assessing the creditworthiness of borrowers can be divided into classification models and models based on complex analysis.

Table 1

Classification of models for assessing the creditworthiness of borrowers by Professor I.V. Vishnyakova

1.2.1 Classification models for analyzing the borrower’s creditworthiness

The following classification models are distinguished:

Forecasts that allow you to differentiate borrowers depending on the likelihood of bankruptcy;

Rating assessment Endovitskaya D.A., Bocharova I.V. Analysis and assessment of the borrower’s creditworthiness, [Text]: educational practical guide / D.A. Endovitskaya. - M.: KNORUS, 2005. - 272 p. (total score) is calculated by multiplying the indicator value by its weight (significance coefficient) in the integral indicator. In world practice, when assessing creditworthiness based on a system of financial ratios, the following five groups of ratios are mainly used: liquidity, turnover, financial leverage, profitability of debt servicing.

The American scientist E. Reed proposed the following system of indicators that determine various characteristics of an enterprise's creditworthiness: liquidity, turnover, fundraising, profitability. This system allows you to predict the timeliness of future payments, the liquidity and reality of current assets, assess the overall financial condition of the company and its stability, as well as the ability to determine the limits of the reduction in profit volume within which part of the fixed payments is repaid.

Another group of scientists (J. Shim, J. Siegel, B. Needles, G. Anderson) proposed using groups of indicators characterizing liquidity, profitability, long-term solvency and indicators based on market criteria. In contrast to E. Reed's methodology, this approach makes it possible to predict long-term solvency, taking into account the degree of protection of creditors from non-payment of interest (interest coverage ratio).

This approach allows you to characterize the financial condition of the borrower based on a synthesized rating indicator, calculated in points assigned to each coefficient value. In accordance with the scores, the class of the organization is established: first-class, second-class, third-class or insolvent. The class of the organization is taken into account by the bank when developing a scale of interest rates, determining lending conditions, establishing a lending regime (form of loan, size and type of credit line), assessing the quality of the loan portfolio, and analyzing the financial stability of the bank.

A modification of the rating assessment is the credit scoring technique Endovitskaya D.A., Bocharova I.V. Analysis and assessment of the borrower’s creditworthiness, [Text]: educational practical guide / D.A. Endovitskaya. - M.: KNORUS, 2005. - 272 p.; , proposed in the early 40s of the twentieth century. American scientist D. Durant to select borrowers for consumer loans. The difference between credit scoring is that in the rating formula, instead of the indicator value, its partial score is used. For each indicator, several value intervals are defined, each interval is assigned a certain number of points or a class is determined. If the rating received by the borrower is lower than the value previously established by the bank employees, then such a borrower will be denied a loan, and if it meets the standards, the loan application will be granted.

The rating assessment allows you to predict the timeliness of future payments, the liquidity and reality of current assets, assess the general condition of the company and its stability, and also makes it possible to determine the limits of the decrease in the volume of profit within which part of the fixed payments is repaid.

The advantages of the rating model are simplicity (since it is enough to calculate financial ratios and, taking into account the coefficients of their significance, determine the class of the borrower), the ability to calculate optimal values ​​for particular indicators, the ability to rank organizations based on results, an integrated approach to assessing creditworthiness (since it uses indicators , reflecting various aspects of the organization’s activities).

Forecast models Endovitskaya D.A., Bocharova I.V. Analysis and assessment of the borrower’s creditworthiness, [Text]: educational practical guide / D.A. Endovitskaya. - M.: KNORUS, 2005. - 272 p. , obtained using statistical methods, are used to assess the quality of potential borrowers. Multiple discriminant analysis (MDA) uses a discriminant function (Z) that takes into account certain parameters (regression coefficients) and factors characterizing the financial condition of the borrower (including financial ratios). Regression coefficients are calculated as a result of statistical processing of data from a sample of firms that either went bankrupt or survived for a certain time. If the firm's Z-score is closer to that of the average bankrupt firm, if its position continues to deteriorate, it will go bankrupt. If the firm's managers and the bank make efforts to eliminate financial difficulties, then bankruptcy may not occur. Thus, the Z-score is a signal to prevent the company from going bankrupt. The application of this model requires an extensive representative sample of firms across different industries and scales of activity. The difficulty is that it is not always possible to find a sufficient number of bankrupt firms within an industry to calculate the regression coefficient.

The most well-known MDA models are the Altman and Chesser models, which include the following indicators: the ratio of own working capital to the amount of assets; ratio of reinvest profits to total assets; the ratio of the market value of shares to borrowed capital; the ratio of sales volume (revenue from sales to the amount of assets; the ratio of gross profit (earnings before interest and taxes) to the amount of assets.

When classifying loans, it is possible to use the CART model, which translates as “classification and regression trees.” This is a non-parametric spruce, the main advantages of which are the possibility of wide application, ease of understanding and ease of calculation, although complex statistical methods are used in construction. In the “classification tree”, borrowing firms are located on a certain “branch” depending on the values ​​of the selected financial ratios; then there is a “branching” of each of them depending on the following coefficients. The classification accuracy when using this model is about 90%. An example of a “classification tree” is presented in Appendix. 1.

In addition to the highlighted I.V. Vishnyakov's models need to add a technique that is widely used in domestic practice - a technique based on cash flow analysis.

Cash flow of Korobova G.G. Banking [Text]: textbook / G.G. Korobova. - M.: Economist, 2005. - 751 p. - this is the amount of money that an enterprise receives or pays during the reporting or planning period. The cash flow of an enterprise consists of cash flows in connection with various business transactions, which can be grouped according to their economic content. This technique, in contrast to the approach based on financial ratios, allows you to use not data on balances of assets and liabilities, but ratios determined from data on the turnover of liquid assets, inventories and short-term debt obligations, by calculating the net balance of various income and expenses funds for a certain period. The difference between the inflow and outflow of funds shows the amount of total net cash flow. A short-term excess of outflow over inflow indicates a shortage of funds (lower customer rating). A systematic excess of outflow over inflow of funds characterizes the client as uncreditworthy. The current average value of the total cash flow can be set as a limit for issuing new loans, since it shows the amount of funds with which the client is able to repay debt obligations. Based on the ratio of the total cash flow and the size of the client’s debt obligations, his creditworthiness class is determined. Analysis of cash flow allows us to draw conclusions about the weaknesses of enterprise management. When deciding whether to issue a long-term loan, cash flow analysis is carried out not only on the basis of data for the past period, but also on the basis of forecast data for the planned period.

1.2.2 Credit assessment models based on complex analysis methods

Within the framework of complex analysis models, it is possible to combine quantitative and qualitative characteristics of the borrower. For example, in the practice of US banks, the “six C” rule is used, which is based on the use of six basic principles of lending, designated by words starting with the English letter “C” (C): Character, Capacity, Cash, Collateral, Conditions, Control Korobova G.G. Banking [Text]: textbook / G.G. Korobova. - M.: Economist, 2005. - 751 p.; .

Character of the borrower (Character): responsibility, reliability, honesty, decency and seriousness of the client’s intentions.

Capacity: The loan officer must be satisfied that the client seeking the loan has the legal authority to submit a loan application and sign the loan agreement, i.e. is that the director or representative of the company (bank) applying for a loan has the appropriate authority granted to him by the founders or the board of directors to negotiate and sign a loan agreement on behalf of the company (bank).

Cash: An important consideration in any loan application is the determination of the borrower's ability to repay the loan with funds received from the sale or liquidation of assets, cash flow, or borrowed resources.

Collateral: When assessing collateral for a loan application, it is necessary to determine whether the borrower has sufficient capital or quality assets to provide the necessary collateral for the loan; unsecured loans are provided to prime borrowers who have qualified management and an excellent credit history.

Conditions: The loan officer must know how the borrower is doing, what the industry situation is like, and how changing economic and other conditions in the country may affect the loan repayment process.

Control comes down to finding out how much changes in legislation, legal, economic and political conditions can negatively affect the borrower’s activities and his creditworthiness.

Analysis of the client’s creditworthiness in accordance with the basic principles of lending contained in the “CAMPARI” methodology by Korobov G.G. Banking [Text]: textbook / G.G. Korobova. - M.: Economist, 2005. - 751 p.; , consists of sequentially identifying from the loan application and attached financial documents the most significant factors that determine the client’s activities, assessing and clarifying them after a personal meeting with the client. The name CAMPARI is formed from the initial letters of the following words: C (Character) - reputation, characteristics of the client; A (Ability) - the ability to repay a loan; M (Margin) - profitability; P (Purpose) - purpose of the loan; A (Amount) -- loan size; R (Repayment) -- repayment terms; I (Insurance) - collateral, insurance of the risk of non-repayment of a loan.

In England, the manual on banking services notes that the key word, which focuses on the requirements for giving loans to borrowers, is “PARTS” by G.G. Korobov. Banking [Text]: textbook / G.G. Korobova. - M.: Economist, 2005. - 751 p.; : P (Purpose) - purpose, purpose of obtaining a loan; A (Amount) - amount, size of the loan; R (Repayment) - payment, return (debt and interest); T (Term) - term of the loan; S (Security) - ensuring loan repayment.

Complex methods for assessing the borrower's creditworthiness are used by many commercial banks, but these methods are not sufficiently theoretically developed and little mathematical apparatus is used in them.

The main disadvantages of the system for selecting borrowers by commercial banks today are:

1. Subjectivism - often decisions made by loan officers are based only on intuition and personal experience;

2. Inflexibility and instability, the quality of the assessment is a random variable that cannot be improved or worsened and depends on the emotional state and preferences of the expert;

3. Lack of a system of training, knowledge transfer and advanced training - before becoming a highly qualified specialist, it is necessary to accumulate a certain level of knowledge based on acquiring sufficient experience in this field, and the training of credit analysts is, as a rule, at an insufficiently high level due to the lack of effective analysis methods and teaching technologies;

4. Limitation on the number of applications being considered, which is due to limited physical resources of a person, resulting in lost profits from limiting the number of applications being considered.

In recent years, a technique developed by specialists from the Association of Russian Banks has gained some popularity. According to this methodology, assessing the borrower’s activities and the terms of its lending involves analyzing its creditworthiness in the following areas: “reliability” - responsibility of management, timeliness of payments on previously received loans; “ability” to produce and sell products, maintaining their competitiveness; “profitability” is the preference for investing in a given borrower; the “reality” of achieving project results; “reasonableness” of the requested loan amount; “repayment” due to the sale of the borrower’s material assets if his project is not completed; “security” of the loan with the legal rights of the borrower Endovitskaya D.A., Bocharova I.V. Analysis and assessment of the borrower’s creditworthiness, [Text]: educational practical guide / D.A. Endovitskaya. - M.: KNORUS, 2005. - 272 p. . It is recommended to evaluate the last four points based on an analysis of grouped balance sheet items in the following areas: profitability, liquidity, turnover of non-current and current assets, security. From each group it is necessary to select one indicator that is most characteristic of the organization being analyzed and collect statistics on them. The disadvantages of the methodology are the impossibility of using it to assess creditworthiness for long-term lending and the fact that many risk factors are not taken into account, the effect of which may be felt after a certain time.

In most cases, Russian banks in practice, to reliably assess the financial condition of the borrower, use express methods for analyzing the financial condition, as well as cash flow analysis. On methods for assessing the borrower’s creditworthiness [Text] / I.I. Kazakova // Money and Credit. - 2007. - No. 6. At the same time, along with quantitative indicators for assessing the creditworthiness of borrowers, banks also pay attention to qualitative indicators, external and internal factors affecting business. The main problem in assessing the financial condition is the development of standard values ​​for comparison, since there is a spread of values ​​caused by the industry specifics of business entities, and the acceptable standard levels of financial indicators given in the economic literature are calculated without taking this into account. Due to the lack of a unified regulatory framework from an industry perspective, an objective assessment of the borrower’s financial condition is impossible, since there are no comparative industry averages, minimum acceptable and best indicators for a given industry.

In modern conditions, commercial banks develop and use their own methods for assessing the creditworthiness of borrowers, taking into account the interests of the bank.

1.2.3 Credit assessment based on business risk analysis

Practice shows that it is advisable to highlight a methodology based on the analysis of business risk. On methods for assessing the borrower’s creditworthiness [Text] / I.I. Kazakova // Money and Credit. - 2007. - No. 6, often described in Russian economic literature and using qualitative factors when assessing the borrower.

Business risk Korobova G.G. Banking [Text]: textbook / G.G. Korobova. - M.: Economist, 2005. - 751 p.; - risk associated with untimely completion of the circulation of funds and ineffective use of resources (financial, technical, labor).

The methodology for assessing creditworthiness based on business risk analysis is still under development and is not adapted to banking practice in the same way as using financial ratios. The value of production performance indicators (if information is available) and the scoring methodology will make it possible to supplement the assessment of creditworthiness based on financial ratios (see paragraph 1.2.4).

1.2.4 Assessment of the creditworthiness of bank borrowers based on financial ratios

The traditional method of analyzing the borrower's creditworthiness is the analysis method based on financial ratios.

It is customary to combine the financial ratios of an enterprise into the following groups Korobova G.G. Banking [Text]: textbook / G.G. Korobova. - M.: Economist, 2005. - 751 p. :

1. Liquidity ratios;

2. Asset utilization efficiency ratios;

3. Financial leverage ratios;

4. Profitability (profitability) ratios.

The basis of information for calculating financial ratios in a bank are:

1. Financial (accounting) statements of the enterprise;

2. Balance sheet income statement;

3. Decoding of the enterprise about the timing of receivables and payables;

4. Planned calculations of the enterprise: business plans, feasibility studies for obtaining a loan, etc.

Liquidity of an enterprise is the ability to repay debt obligations on time.

The liquidity of an enterprise is characterized by balance sheet liquidity indicators in the form of the ratio of assets and payment obligations. Based on the degree of liquidity, the assets of an enterprise are usually combined into the following groups:

1) quickly realizable assets - cash and short-term financial investments from the 2nd section of the balance sheet;

2) average realizable assets - accounts receivable with a period of up to 12 months from the 2nd section of the balance sheet;

3) slowly selling assets - inventories and costs from the 2nd section of the balance sheet;

4) permanent assets - non-current assets from its balance sheet section. This also includes accounts receivable with a maturity period of more than 12 months from the 2nd section of the balance sheet.

The standard value of the absolute (quick) liquidity ratio is accepted at the level of 0.2-0.25 (or 20-25%), i.e. With normal solvency, it is considered sufficient for an enterprise to have up to 25% of available funds to pay current debts.

The standard value of the current liquidity ratio (interim ratio) is accepted at the level of 0.7 - 0.8 (or 70 - 80%).

The standard value of the coverage ratio (total liquidity) is accepted at the level of 2.0 (or 200%).

The coverage ratio is given special importance. It serves as the basis for recognizing the balance sheet structure as unsatisfactory (when assessing an enterprise for the degree of its insolvency). In commercial banks, the coverage ratio is used to estimate the borrower's lending limit. The bank may stop issuing loans if the coefficient is equal to or less than one. This means that there is nothing to pay for current obligations.

Asset utilization efficiency ratios. The efficiency of asset use is characterized by turnover indicators. The most common ones are:

1. Duration of one asset turnover days;

2. Number of asset turnovers for the period;

3. Asset turnover ratio.

The coefficients are also calculated:

1) financial leverage (leverage). Financial leverage is quantitatively measured by the ratio between debt and equity capital of Korobov G.G. Banking [Text]: textbook / G.G. Korobova. - M.: Economist, 2005. - 751 p.; . The level of financial leverage directly affects the degree of financial risk of the enterprise, its profit, and therefore its financial stability. The higher the level of financial leverage, the greater the costs incurred by the enterprise in servicing debts, the less stable the enterprise is considered.

Financial leverage ratio ()

ZK - borrowed capital;

SK - Own capital.

The optimal ratio is considered to be one. The lower the value is to one, the less dependence on other people’s funds, the lower the debt servicing costs, the better for the enterprise.

2) coefficient of autonomy (independence):

WB is the bank's currency.

The optimal ratio is considered to be 0.5. the higher the value of this coefficient, the more financially independent the enterprise is considered. As you can see, both coefficients are interrelated: the higher, the lower, the better for the enterprise.

3) profitability (profitability) ratios. These coefficients are used to generally characterize the use of all capital and are considered as additional to the indicators of the above groups of coefficients. The following profitability indicators can be used to assess creditworthiness.

Profitability per unit of sold products (for highly specialized enterprises), %:

Profit from the sale of one product

P = ________________________________________________________________

Cost of this product

This indicator has an optimal value of 25% (at an inflation rate of no higher than 5-7% per year).

Profitability of all products sold (with an expanded range of products manufactured, work performed or services provided),%:

Profit from sales of all products

P = __________________________________________________________

Cost of goods sold

This indicator does not officially have a normative value, but some sources of economic literature indicate standard figures for optimal profitability - 15%.

Profitability of all assets of the enterprise,%:

Profit for the reporting year

P = ___________________________________

Average assets

Taking into account the different volumes of enterprises and the features of production technology, a standard value for this indicator is not established.

All profitability indicators characterize the best return on operating capital if they increase over time. Therefore, in banking practice it is necessary to use these indicators (as well as the coefficients of other groups) for several reporting periods or at least for two reporting dates. Of the three profitability ratios, when assessing creditworthiness, the second or third is most often used, since data on the profitability of certain types of products is not available in publicly available information.

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In modern economic conditions, the financial sector, including its component such as credit institutions (banks), is the most important infrastructural element that contributes to the strengthening and comprehensive development of a market economy.

Macroeconomic instability in the country has a negative impact on the banking system. At the same time, lending, which in most cases brings banks the main share of income, also generates an increased risk of such activity. That is why the problem of economic analysis of the borrower’s creditworthiness is of particular importance in the process of creating the necessary conditions for the implementation of plans for the dynamic development of industry and achieving sustainable growth rates of the entire Russian economy.

Assessing the creditworthiness of potential borrowers is one of the most difficult and responsible tasks in the activities of a commercial bank. Effective organization of the credit assessment process allows, firstly, to reduce the level of bank credit risks, and secondly, to create the necessary conditions for high-quality service to bank clients who have a demand for credit products. The relevance of this task is difficult to overestimate, since the increasing demand for credit products from enterprises in various sectors of the national economy and increased competition in the banking services market caused by the expansion of foreign credit institutions into the Russian credit market requires banks to improve mechanisms for assessing creditworthiness in order to improve the quality of customer service and at the same time minimizing credit risks.

In the first chapter of my course work, I would like to dwell on the definition of the theoretical aspects of assessing the creditworthiness of a borrower by a commercial bank. In particular, it evaluates existing approaches to defining the concept of “creditworthiness”, highlights the goals and objectives of assessing a bank’s creditworthiness, examines the criteria for a client’s creditworthiness, conducts a comparative assessment of domestic and foreign approaches to assessing the creditworthiness of borrowers, and provides a description of information sources for the purposes of analysis and assessment of creditworthiness borrower.

The second chapter directly presents systems for assessing the creditworthiness of various types of clients of a commercial bank, that is, it examines the assessment of the creditworthiness of large, medium and small enterprises, and also outlines the features of assessing the creditworthiness of individuals.

In the modern Russian economy, during the period of formation and development of a new type of economic relations, when economic entities are independent in choosing most of the decisions they make, the question of the need to develop an effective capital management program is of paramount importance.

An organization's own capital is not yet a guarantee of profit. However, even if one exists, this does not mean that it will be sufficient for investment in production development, replenishment of current assets, etc. Own financial resources are the basis for the stable operation of an organization, but at the same time these are rather inactive resources and it is risky to consider them as a long-term source of financing for the expanded reproduction of fixed assets and intangible assets or a source of replenishment of current assets. As a result, debt capital is an alternative source of financing.

In the conditions of formation and development of market relations, creditors need to have an accurate idea of ​​​​the creditworthiness of their partner. To achieve this goal, commercial banks are developing their own methods for determining creditworthiness. However, for this it is necessary to clearly define what this concept, characteristic of a market economy, includes. The process of transition to market relations has significantly changed the relationship between organizations and their creditors. The terms of mutually beneficial partnership and common economic interest, directly related to the borrower’s creditworthiness, came to the fore.

Creditworthiness is the borrower’s ability to pay off his debt obligations (principal and interest) in full and on time. It can also be noted that the financial condition of an enterprise is expressed by its payment and creditworthiness, i.e. the ability to timely satisfy payment requirements in accordance with business contracts, repay loans, pay wages to workers and employees, make payments and taxes to the budget.

The given definitions are not entirely correct, since they do not distinguish between the terms “creditworthiness” and “solvency”. The latter precisely implies the organization’s ability to pay off all types of obligations, and creditworthiness implies the ability to pay only loan obligations. Solvency is the ability to satisfy the demands of creditors at the moment, and creditworthiness is a forecast of such ability for the future. And one more significant difference. The organization repays its usual obligations (except for debt on loans), as a rule, from proceeds from the sale of products (works, services). The loan can be repaid either from the borrower’s own funds or from funds received from the bank’s sale of collateral pledged, funds from a guarantor or guarantor, or insurance compensation. In addition, creditworthiness is determined not only by how liquid the organization’s assets are used to repay obligations, but also by many other factors that do not directly depend on the business entity (counterparties, sales markets, etc.) and are not always quantifiable.

There is also an approach to determining creditworthiness that links it with solvency, however, given the above, depending on the purposes of the analysis, they can be considered as different concepts. It can be noted that the concept of creditworthiness is the borrower’s ability to repay only the loan debt and it follows that the characteristic of creditworthiness should be different from solvency, since in accordance with the principles of lending, borrowed funds can be repaid both from revenue from the main activity and from secondary sources of security (realization of collateral, collection from the guarantor).

At the same time, several basic conditions are taken into account in assessing creditworthiness: the structure of the capital used and financial stability; assessment of manufactured products from the point of view of demand for them under current market conditions; liquidity of the enterprise's assets. It must be emphasized that the creditworthiness of a business entity is not limited only to the above conditions, but is much broader and includes many other conditions, for example, requirements for the level of profitability of activities, turnover of various types of assets, return on investment, quality of management of the organization, content of credit history.

When interpreting the term “borrower’s creditworthiness”, as a rule, a set of certain factors is taken into account, including: the capacity and legal capacity of the borrower to complete a credit transaction; his business reputation; availability of collateral; the borrower's ability to earn income - generate cash flows.

The problem of assessing the borrower’s creditworthiness and the term “creditworthiness” itself have been studied and developed at different times. Issues of creditworthiness were quite relevant and were covered in the economic literature of the pre-revolutionary period and in the works of economists of the 20s of the 20th century; interest in them has increased since the late 80s, at the beginning of economic reforms in the country. During the NEP period, economists generally understood creditworthiness, from the borrower’s point of view, as the ability to complete a credit transaction, the possibility of timely repayment of the loan received; from the bank's position - the correct determination of the size of the permissible loan. During the period of development of market relations, special attention began to be paid to the liquidity of the borrower’s assets. Therefore, an analysis of changes in approaches to the definition of the concept of “creditworthiness” allows us to say that it is influenced by the developing economic environment of the functioning of the lender and the borrower.

So, creditworthiness of the borrower (business entity)- its comprehensive legal and financial characteristics, represented by financial and non-financial indicators, allowing one to assess its ability in the future to fully and within the period stipulated in the loan agreement to pay off its debt obligations to the lender, as well as determining the degree of risk of the bank when lending to a specific borrower.

The creditworthiness of a borrower depends on many factors, each of which must be assessed and studied. A significant and very difficult problem for an analyst is to determine changes in all factors, causes and circumstances affecting creditworthiness in the future. That's why target analysis of the borrower’s creditworthiness consists of a comprehensive study of his activities for a reasonable assessment of the possibility of returning the resources provided to him and involves solving the following tasks :

· justification of the optimal amount of financial resources provided by the lender and methods of their repayment;

· determining the effectiveness of the borrower's use of credit resources;

· carrying out a current assessment of the borrower’s financial condition and forecasting its changes after the provision of credit resources;

· carrying out ongoing control (monitoring) on ​​the part of the lender over the borrower’s compliance with the requirements regarding indicators of its financial condition;

· analysis of the feasibility and effectiveness of decisions made by management to achieve and maintain at an acceptable level the creditworthiness of the borrowing organization;

· identification of credit risk factors and assessment of their influence on decision-making on issuing a loan to the borrower;

· analysis of the sufficiency and reliability of the collateral provided by the borrower.

Global and domestic banking practice has made it possible to highlight client credit criteria: the nature of the client, the ability to borrow funds, the ability to earn funds in the course of current activities to repay the debt (financial capabilities), capital, loan collateral, conditions under which the credit transaction is made, control (legislative basis for the borrower’s activities, compliance of the nature of the loan with the standards of the bank and authorities supervision).

Under the client's character its reputation as a legal entity and the reputation of managers, the degree of responsibility of the client for repaying the debt, the clarity of his understanding of the purpose of the loan, and its compliance with the bank’s credit policy are understood. The client’s reputation as a legal entity consists of the duration of its functioning in this area, the compliance of economic indicators with the industry average, its credit history, and the reputation of its partners (suppliers, buyers, creditors) in the business world.

Ability to borrow funds means that a representative of an enterprise or firms has certain powers, has reached the age of majority or other signs of the legal capacity of the borrower - an individual. Signing an agreement by an unauthorized or incapacitated person means a greater likelihood of losses for the bank.

One of the main criteria for a client’s creditworthiness is his the ability to earn funds to pay off debt in the course of current activities. Another position is known, set out in the economic literature, when creditworthiness is associated with the degree of capital investment in real estate. The latter is a form of protection against the risk of depreciation of funds in conditions of inflation; this cannot be the main indicator of the borrower’s creditworthiness. The fact is that it takes time to release cash from real estate. Investing in real estate involves the risk of asset impairment. Therefore, it is advisable to focus on the liquidity of the balance sheet, the efficiency (profitability) of the borrower’s activities, and its cash flows.

Client's capital is an equally important criterion for the client’s creditworthiness. In this case, the following two aspects of its assessment are important: 1) its sufficiency, which is analyzed on the basis of established requirements for the minimum level of the authorized capital (share capital) and financial leverage ratios; 2) the degree of investment of equity capital in the loaned transaction, which indicates the distribution of risk between the bank and the borrower. The greater the equity investment, the greater the borrower's interest in carefully monitoring credit risk factors.

Under securing a loan refers to the value of the borrower’s assets and the specific secondary source of debt repayment (collateral, guarantee, surety, insurance) provided for in the loan agreement. If the ratio of the value of assets and debt obligations is important for repaying a bank loan in the event of a borrower being declared bankrupt, then the quality of a particular secondary source guarantees that it will fulfill its obligations on time in the event of financial difficulties. The quality of the collateral, the reliability of the guarantor, guarantor and insured are especially important if the bank client has insufficient cash flow, problems with the liquidity of his balance sheet or capital adequacy.

TO conditions under which the credit transaction is carried out, include the current or forecast economic situation in the country, region and industry, and political factors. These conditions determine the degree of external risk of the bank and are taken into account when deciding on the bank’s standards for assessing cash flow, balance sheet liquidity, capital adequacy, and the level of management of the borrower.

The last criterion is control for the legislative basis of the borrower’s activities and compliance with its standards, the bank aims the banker to obtain answers to the following questions: is there a legislative and regulatory basis for the functioning of the borrower and the implementation of the activity being financed, how will the expected change in legislation (for example, tax) affect the results of the borrower’s activities, how much information about the borrower and the loan contained in the loan application meet the bank’s standards recorded in the credit policy document, as well as the standards of banking supervisory authorities that monitor the quality of loans.

The stated criteria for assessing the creditworthiness of a bank client determine the content of the methods for assessing it. These methods include:

· business risk assessment;

· management assessment;

· assessment of the client’s financial stability based on a system of financial ratios;

· cash flow analysis;

· collection of information about the client;

· monitoring the client's work by going on site.

Despite the unity of criteria and assessment methods, there are specifics in the analysis of the creditworthiness of legal entities and individuals, large, medium and small clients. This specificity lies in the combination of assessment methods used, as well as in their content.

The borrower's creditworthiness depends on many factors, each of which is not easy to assess and calculate. Most of the creditworthiness indicators analyzed in practice are based on data for the past period or at some reporting date, however, they are all subject to the distorting influence of inflation. It is difficult to identify and quantify certain factors, such as the moral character and reputation of the borrower. In addition, many methods and approaches are used to solve this problem, which do not exclude each other, but complement each other and make the assessment of the borrower’s creditworthiness more consistent with reality.

This classification of approaches to assessing the creditworthiness of commercial bank borrowers seems successful (Fig. 1.1).

Rice. 1.1. Classification of models for assessing the creditworthiness of borrowers

Classification models for analyzing the borrower's creditworthiness : Classification models make it possible to group borrowers: forecast models make it possible to differentiate them depending on the likelihood of bankruptcy; rating - depending on their category, established using a group of calculated financial ratios and significance levels assigned to them.

Rating score(total score) is calculated by multiplying the indicator value by its weight (significance coefficient) in the integral indicator. In world practice, when assessing creditworthiness based on a system of financial ratios, the following five groups of ratios are mainly used: liquidity, turnover, financial leverage, profitability, and debt service.

A group of scientists (J. Shim, J. Siegel, B. Needles, G. Anderson, D. Caldwell) proposed using groups of indicators characterizing liquidity, profitability, long-term solvency and indicators based on market criteria. This approach makes it possible to predict long-term solvency, taking into account the degree of protection of creditors from non-payment of interest (interest coverage ratio). Market-based ratios include share price-to-earnings ratio, dividends and market risk. With their help, the ratio of the current stock exchange price of shares to income per share, the current profit of their owners, and the variability of the company's stock price relative to the stock prices of other companies are determined. However, the calculation of some coefficients is complex and requires the use of special statistical methods. In practice, each commercial bank chooses certain coefficients for itself and resolves issues related to the methodology for their calculation. This approach allows you to characterize the financial condition of the borrower on the basis of a synthesized rating indicator, calculated in points assigned to each coefficient value. In accordance with the scores, the class of the organization is established: first-class, second-class, third-class or insolvent. The bank takes into account the class of the organization when developing a scale of interest rates, determining lending conditions, establishing a lending regime (form of loan, size and type of credit line, etc.), assessing the quality of the loan portfolio, and analyzing the financial stability of the bank.

A modification of the rating score is credit scoring- a technical technique proposed in the early 40s of the XX century. American scientist D. Durant to select borrowers for consumer loans. The difference between credit scoring is that in the rating formula, instead of the indicator value, its partial score is used. For each indicator, several value intervals are determined, each interval is assigned a certain number of points or a class is determined. If the rating received by the borrower is lower than the value previously established by the bank employees, then such a borrower will be denied a loan, and if it meets the standards, the loan application will be granted. The advantages of the rating model are simplicity, the ability to calculate optimal values ​​based on specific indicators, the ability to rank organizations based on results, and an integrated approach to assessing creditworthiness. However, when using this technique, a number of problems should be taken into account:

· the need for careful selection of financial indicators (it is necessary to use indicators that describe different aspects of the borrower’s work in order to more fully characterize its position);

· the need to substantiate the significance coefficients for each group of indicators in accordance with the industry of a particular borrower;

· determination of the magnitude of deviations in border areas that classify borrowers into different classes;

· the rating assessment takes into account the levels of indicators only relative to the optimal values ​​that correspond to certain established standards, but does not take into account the degree of their implementation or non-compliance;

· financial ratios reflect the state of affairs in the past based on data on balances;

· calculated coefficients show only certain aspects of activity;

· the system of calculated coefficients does not take into account many factors - the borrower’s reputation, prospects and features of market conditions, assessments of manufactured and sold products, investment prospects, etc.

Predictive models, obtained using statistical methods, are used to assess the quality of potential borrowers. Multiple discriminant analysis (MDA) uses a discriminant function (Z) that takes into account certain parameters (regression coefficients) and factors characterizing the financial condition of the borrower (including financial ratios). Regression coefficients are calculated as a result of statistical processing of data on a sample of firms that either went bankrupt or survived for a certain period of time.If
If the firm's Z-score is closer to that of the average bankrupt firm, it will go bankrupt if its position continues to deteriorate. If the firm's managers and the bank make efforts to eliminate financial difficulties, then bankruptcy may not occur. Thus, the Z-score is a signal to prevent the company from going bankrupt. Application of this model requires a large representative sample of firms across different industries and scales of activity. The difficulty is that it is not always possible to find a sufficient number of bankrupt firms within an industry to calculate the regression coefficient.

The most well-known MDA models are the Altman and Chesser models, which include the following indicators: the ratio of own working capital to the amount of assets; the ratio of reinvested profits to the amount of assets; the ratio of the market value of shares to borrowed capital; the ratio of sales proceeds to the amount of assets; The ratio of earnings before interest and taxes to total assets.

An organization is assigned to a certain reliability class based on the Z-index values ​​of the Altman model. Altman's five-factor model built on the basis of an analysis of the state of 66 companies and allows us to give a fairly accurate forecast of bankruptcy for two to three years in advance. Building such models in Russian conditions is quite difficult due to the lack of statistical data on the bankruptcy of organizations, the constant change in the regulatory framework in the field of bankruptcy and the recognition of bankruptcy of an organization on the basis of data that cannot be taken into account.

Chesser model allows you to predict the client’s failure to comply with the terms of the loan agreement. Default involves not only the failure to repay the loan, but also any other deviation that makes the relationship between the lender and the borrower less favorable compared to the original terms. The linear combination of independent variables used (Z) includes: the ratio of cash on hand and the value of marketable securities to the amount of assets; the ratio of net sales (excluding VAT) to the amount of cash on hand and the cost of easily marketable securities; the ratio of earnings before interest and taxes to total assets; ratio of total debt to total assets; ratio of fixed capital to net assets; the ratio of working capital to net sales. The resulting indicator can be considered as an assessment of the probability of non-fulfillment of the terms of the loan agreement. Chesser used data from a number of banks for 37 “satisfactory” and 37 “unsatisfactory” loans and used the balance sheets of borrowing firms for the year before receiving the loan for the calculation. By substituting the model's estimates into the formula for the probability of contract violation, Chesser correctly identified three out of every four cases studied.

When classifying loans it is possible to use models CART( Classification and regression trees), which translates to “classification and regression trees.” This is a nonparametric model, the main advantages of which are the possibility of wide application, ease of understanding and ease of calculation, although complex statistical methods are used in its construction. In the “classification tree”, borrowing firms are located on a certain “branch” depending on the values ​​of the selected financial ratios; then there is a “branching” of each of them depending on the following coefficients. The classification accuracy when using this model is about 90%. An example of a “classification tree” is shown in Fig. 1.2, where Ki is a financial ratio; Pi - standard value of the indicator; B - alleged bankrupt; S - presumably stable state.

K1<= P1 К1 >P1

K2<= P2 К2 >P2 K3<= P3 К3 >P3

K4<= P4 К4 >P4

Rice. 1.2. "Classification tree" of the CART model

Credit assessment models based on complex analysis methods: When using mathematical models, the influence of “qualitative” factors when banks provide loans is not taken into account. These models only partly allow bank credit experts to make a conclusion about the possibility of granting a loan. The disadvantages of classification models are their “closedness” to quantitative factors, the arbitrariness of choosing a system of quantitative indicators, high sensitivity to the unreliability of source data, and cumbersomeness when using statistical inter-industry and industry data. Within the framework of complex analysis models, it is possible to combine quantitative and qualitative characteristics of the borrower. For example, in the practice of US banks it is used "Six C's" rule, which is based on the use of six basic lending principles, designated by words starting with the English letter “C”: Character, Capacity, Cash, Collateral, Conditions, Control.

Character of the borrower (Character); responsibility, reliability, honesty, decency and seriousness of the client’s intentions.

Capacity: The loan officer must be satisfied that the client seeking the loan has the legal authority to submit a loan application and sign the loan agreement, i.e. is that the director or representative of the company (bank) applying for a loan has the appropriate authority granted to him by the founders or the board of directors to negotiate and sign a loan agreement on behalf of the company (bank).

Cash: An important consideration in any loan application is the determination of the borrower's ability to repay the loan using proceeds from the sale or liquidation of assets, cash flow, or borrowed resources.

Collateral: When assessing collateral for a loan application, it is necessary to determine whether the borrower has sufficient capital or quality assets to provide the required collateral for the loan; unsecured loans are provided to prime borrowers who have qualified management and an excellent credit history.

Conditions: The loan officer must know how the borrower is doing, what the situation is in the relevant industry, as well as how changes in economic and other conditions in the country may affect the loan repayment process.

Control comes down to finding out how much changes in legislation, legal, economic and political conditions can negatively affect the borrower’s activities and his creditworthiness.

Analysis of the client's creditworthiness in accordance with the basic principles of lending contained in method " CAMPARI", consists of sequentially identifying from the loan application and attached financial documents the most significant factors that determine the client’s activities, assessing and clarifying them after a personal meeting with the client. The name CAMPARI is formed from the initial letters of the following words: C (Character) - reputation, characteristics of the client; A (Ability) - ability to repay a loan; M(Margin) - margin, profitability; P (Purpose) - purpose of the loan; A (Amount) - loan size; R (Repayment) - terms of loan repayment; I (Insurance) - collateral, insurance of the risk of non-repayment of a loan.

In England, the guidelines for banking services note that the keyword that focuses on the requirements for issuing loans to borrowers is “PARTS”: P (Purpose) - purpose, purpose of obtaining a loan; A (Amount) - amount, loan size; R (Repayment) - payment, return (debt and interest); T (Term) - term of the loan; S (Security) - ensuring loan repayment.

In recent years, it has gained some popularity methodology developed by specialists of the Association of Russian Banks (DRB) . According to this methodology, assessing the borrower’s activities and the terms of its lending involves analyzing its creditworthiness in the following areas: “reliability” - responsibility of management, timeliness of payments on previously received loans; “ability” - production and sales of products, maintaining their competitiveness; “profitability” - the preference for investing in a given borrower; the “reality” of achieving project results; “reasonableness” of the requested loan amount; “repayment” due to the sale of the borrower’s material assets if his project is not completed; “security” of the loan with the legal rights of the borrower. It is recommended to evaluate the last four points based on an analysis of grouped balance sheet items in the following areas: profitability, liquidity, turnover of non-current and current assets, security. From each group it is necessary to select one indicator that is most characteristic of the organization being analyzed and collect statistics on them. The disadvantages of the methodology are the impossibility of using it to assess creditworthiness for long-term lending and the fact that many risk factors are not taken into account, the effect of which may be felt after a certain time.

In most cases, Russian banks in practice use methods for assessing creditworthiness based on a set of financial ratios that characterize the financial condition of the borrower. The main problem in this case is the development of standard values ​​for comparison, since there is a scatter of values ​​caused by the industry specifics of business entities, and the acceptable standard levels of financial indicators given in the economic literature are calculated without taking this into account. Due to the lack of a unified regulatory framework from an industry perspective, an objective assessment of the borrower’s financial condition is impossible, since there are no comparative industry averages, minimum acceptable and best indicators for a given industry.

In modern conditions, commercial banks develop and use their own methods for assessing the creditworthiness of borrowers, taking into account the interests of the bank.

One of the most important elements of the methodology for analyzing the borrower’s creditworthiness is its information base. The peculiarity of the formation and use of a database for analyzing creditworthiness is that without it it is impossible to realistically and effectively assess the degree of risk of future financial investments of credit resources in a particular business entity.

The information used in the creditworthiness analysis must have the following basic characteristics: completeness, reliability, accessibility and efficiency.

None of the information sources is sufficiently complete, since only on the basis of a comprehensive study and assessment of data from different sources of information can an analyst make informed conclusions about the possibility of providing credit resources. Ignoring certain sources of information may affect the level of lending risk in the direction of its increase. All sources of information must be available for the lender in the course of his analysis of the client’s creditworthiness, since on the basis of the financial statements, constituent documents, audit information, and business plans provided by the borrower, the lender draws its conclusions and makes decisions. At the same time, the degree of trust between him and the lender depends on how conscientiously the borrower treats the process of forming the information base.

Degree efficiency the provision of financial statements, audit information, data from rating agencies and other sources depends on at what stage of the credit analysis it is used. Degree relevance The regulatory and legislative framework in the field of credit relations largely influences various aspects affecting the rights and obligations of lenders and borrowers and determining the dynamics of the development of this process in modern market conditions.

During the analysis, the information used by analysts should not be limited to purely accounting and reporting data, as this narrows the possibilities for analyzing creditworthiness. Therefore, information should include indicators characterizing:

¾ the state of the markets for resources used in the production of products (performance of work, provision of services);

¾ characteristics of the main competitors in the industry and the industry itself in which the business entity is developing or intends to develop in the future;

¾ the state and prerequisites for the development of the political, economic and tax environment in the country as a whole and in the region;

¾ state credit policy for the near future, etc.

To analyze creditworthiness, various internal and external information is used.

TO internal information can be attributed:

· constituent documents;

· legal documents reflecting relationships with investors, depositors, suppliers, buyers, lenders, borrowers, etc.;

· statistical reporting;

· acts of audits, audits and tax audits;

· business plans and feasibility studies;

· primary documents reflecting the composition and valuation of fixed assets and current assets, business transactions, cash flows;

· design and estimate documentation;

· analytical accounting data;

· data on the personnel of the organization;

· financial statements (including appendices and explanations).

External information comes from sources outside the organization, such information includes:

· information from other credit institutions about an economic entity - a potential borrower;

· information from credit history bureaus;

· political information affecting economic areas of activity;

· information about the state and prospects for the development of various industries, interest rates on loans from credit institutions, prospects for changes in exchange rates;

· data on business entities directly related to the activities of the potential borrower (suppliers, buyers, investors, lenders) and influencing this activity;

· information about the borrower’s business reputation, as well as new and personal qualities of the organization’s top management;

The assessment of the creditworthiness of large and medium-sized enterprises is based on actual data from the balance sheet, profit statement, credit application, information about the history of the client and his managers. A system of financial ratios, cash flow analysis, business risk and management are used as methods for assessing creditworthiness.

Financial coefficients for assessing creditworthiness

In global and Russian banking practice, various financial ratios are used to assess the creditworthiness of a borrower. Their choice is determined by the characteristics of the bank’s clientele, possible causes of financial difficulties, and the bank’s credit policy. All used coefficients can be divided into five groups:

I – liquidity ratios:

II – efficiency coefficients, or turnover;

III – financial leverage ratios;

IV – profitability ratios;

V – debt service ratios.

The creditworthiness indicators included in each of these groups may vary greatly. An example is the following system (Table 2.1).

Current ratio(Ktl) shows whether the borrower is in principle able to pay off his debt obligations.

Liquid assets represent that part of current liabilities that relatively quickly turns into cash ready to pay off debt. In global banking practice, liquid assets include cash and accounts receivable; in Russian banking, they also include part of quickly marketable inventories.

The purpose of the quick liquidity ratio is to predict the borrower's ability to quickly release funds from its turnover in cash to repay the bank's debt on time.

Table 2.1

Indicators	Regulatory levels*
1. Liquidity ratios:
current ratios
quick (operational) liquidity ratios
2. Efficiency ratios (turnover):
inventory turnover
receivables turnover
fixed assets turnover
asset turnover
3. Financial leverage ratio
ratio of all debt obligations (short- and long-term) and assets
total debt to equity ratio
total debt to equity ratio
the ratio of all debt obligations and tangible share capital (share capital - intangible assets)
ratio of long-term debt to fixed (fixed) assets
equity to asset ratio
ratio of working capital to current assets
4. Profitability ratios:
rate of return ratio
profitability ratios
EPS ratios
5. Debt service ratios:
interest coverage ratio
fixed charge coverage ratio

Efficiency ratios (turnover) complement the first group of coefficients - liquidity indicators and allow us to make a more informed conclusion. For example, if liquidity indicators are growing due to an increase in accounts receivable and inventory costs while simultaneously slowing down, the borrower’s credit rating cannot be upgraded. The group of efficiency coefficients includes:

Inventory turnover:

a) =

Accounts receivable turnover in days:

Fixed capital turnover (fixed assets):

asset turnover:

Efficiency ratios are analyzed over time and compared with those of competing firms and with industry averages.

Financial leverage indicators characterize the degree of security of the borrower with equity capital.

As can be seen from table. 2.1, the options for calculating the coefficients may be different, but their economic meaning is the same: to estimate the amount of equity capital and the degree of dependence of the client on the attracted resources. In contrast to liquidity ratios, when calculating financial leverage ratios, all debt obligations of a bank client are taken into account, regardless of their terms. The higher the share of raised funds (short-term and long-term) and the lower the share of equity capital, the lower the client’s creditworthiness class. However, the final conclusion is made only taking into account the dynamics of profitability ratios.

Profitability ratios characterize the efficiency of using all capital, including its attracted part. The varieties of these coefficients are:

Profitability ratios:

A)
c) profitability ratios:

A comparison of three types of profitability ratios shows the degree of influence of interest and taxes on the profitability of the company.

The specific methodology for determining the numerator of these coefficients depends on whether interest or fixed payments are included in the cost price or are paid out of profit.

Debt service ratios show how much of earnings are used to repay interest or all fixed payments. These coefficients are of particular importance at high rates of inflation, when the amount of interest paid can be close to the client’s principal debt or even exceed it. The larger part of the profit is used to cover interest paid and other fixed payments, the less it remains to pay off debt obligations and cover risks, i.e. the worse the client's creditworthiness.

The listed financial ratios can be calculated based on actual reporting data. In a stable economy or relatively stable client situation, an assessment of the borrower's future creditworthiness may be based on actual performance in past periods. In conditions of an unstable economy (for example, a decline in production), high inflation rates, actual indicators for past periods cannot be the only basis for assessing the client’s ability to repay his obligations, including bank loans, in the future. In this case, either forecast data should be used to calculate these coefficients, or the considered method of assessing the creditworthiness of an enterprise (organization) will be supplemented by others. The latter includes an analysis of business risk at the time of issuing a loan and management assessment.

When issuing loans for relatively long periods (a year or more), it is also necessary to receive from the client, in addition to a report for past periods, a forecast balance sheet, a forecast of income, expenses and profit for the upcoming period corresponding to the period of the loan. The forecast is usually based on planning the growth (decrease) rate of sales revenue and is justified in detail by the client.

The financial credit ratios described are calculated based on average balance sheet balances as of reporting dates. Indicators for the 1st do not always reflect the real state of affairs and are relatively easily distorted in reporting. The initial turnover indicator is sales revenue. By excluding individual elements from it (material and labor costs, interest, taxes, depreciation, etc.), intermediate indicators are obtained and ultimately net profit for the period is obtained.

Cash flow analysis as a valuation method

borrower's creditworthiness

Cash flow analysis is a method of assessing the borrower’s creditworthiness, which is based on the use of actual indicators characterizing the client’s funds turnover in the reporting period. This method of cash flow analysis is fundamentally different from the method of assessing the client’s creditworthiness based on a system of financial ratios, the calculation of which is based on balance sheet indicators.

Cash flow analysis consists of comparing the outflow and inflow of funds from the borrower over a period usually corresponding to the term of the loan requested. When issuing a loan for a year, cash flow analysis is done on an annual basis, for a period of up to 90 days - on a quarterly basis, etc.

The difference between the inflow and outflow of funds determines the amount of total cash flow. As can be seen from the above list of elements of inflow and outflow of funds, changes in the size of inventories, accounts receivable and payable, other assets and liabilities, fixed assets have different effects on the total cash flow. To determine this impact, balances of inventory items, debtors, creditors, etc. are compared. at the beginning and end of the period. An increase in the balance of inventories, debtors and other assets during the period means an outflow of funds and is shown in calculations with a “–” sign, and a decrease means an inflow of funds and is recorded with a “+” sign. An increase in creditors and other liabilities is considered an inflow of funds (“+”), a decrease is considered an outflow (“–”).

The cash flow analysis model is based on grouping the elements of inflow and outflow of funds into areas of enterprise management. The following blocks may correspond to these areas in the cash flow analysis (CAM) model:

Enterprise profit management;

Inventory and settlement management;

Management of financial obligations;

Tax and investment management;

Management of the ratio of equity and loans.

To analyze cash flow, data is taken for at least three past years. If the client had a stable excess of inflows over outflows of funds, this indicates his financial stability - creditworthiness. Fluctuations in the value of the total cash flow, as well as a short-term excess of outflows over inflows of funds indicate a lower rating of the client in terms of creditworthiness. Finally, a systematic excess of outflows over inflows of funds characterizes the client as uncreditworthy. The resulting average positive value of the total cash flow (the excess of inflows over outflows of funds) can be used as a limit for issuing new loans. The specified excess shows the amount to which the client can repay debt obligations over the period. Based on the ratio of the total cash flow and the size of the client’s debt obligations, his creditworthiness class is determined: standard levels of this ratio: I class – 0.75; II – 0.30; III – 0.25; IV – 0.2; V – 0.2; VI – 0.15.

Analysis of cash flow allows us to draw a conclusion about the weak points of enterprise management. For example, the outflow of funds may be associated with inventory management, settlements (debtors and creditors), financial payments (taxes, interest, dividends). Identification of management weaknesses is used to develop lending conditions reflected in the loan agreement. For example, if the main factor in the outflow of funds is the excessive diversion of funds into payments, then a “positive” condition for lending to a client may be maintaining the turnover of receivables during the entire period of using the loan at a certain level. With such an outflow factor as an insufficient amount of share capital, compliance with a certain standard level of the financial leverage ratio can be used as a condition for lending.

To decide the feasibility and size of issuing a loan for a relatively long period, cash flow analysis is done not only on the basis of actual data for past periods, but also on the basis of forecast data for the planned period. Actual data is used to evaluate forecast data. The forecast of the value of individual elements of the inflow and outflow of funds is based on their average value in previous periods and the planned growth rate of sales revenue.

Business risk analysis as a method of assessment

borrower's creditworthiness

Business risk is the risk associated with the fact that the circulation of the borrower’s funds may not be completed on time and with the expected effect. Business risk factors are various reasons leading to interruption or delay in the circulation of funds at certain stages. Business risk factors can be grouped according to the stages of the cycle.

Stage I - creation of reserves:

Number of suppliers and their reliability;

Capacity and quality of storage facilities;

Compliance of the method of transportation with the nature of the cargo;

Availability of prices for raw materials and their transportation for the borrower;

The number of intermediaries between the buyer and the manufacturer of raw materials and other material assets;

Remoteness of the supplier;

Economic forces;

Fashion for purchased raw materials and other valuables;

Currency risk factors;

The danger of introducing restrictions on the export and import of imported raw materials.

Stage II - production stage:

Availability and qualifications of labor;

Age and capacity of equipment;

Equipment load;

Condition of production premises.

Stage III - sales stage:

Number of buyers and their solvency;

Diversification of debtors;

Degree of protection against non-payment of buyers;

The borrower’s belonging to the basic industry by the nature of the finished product being financed;

Degree of competition in the industry;

Influence on the price of financed finished products of social traditions and preferences, the political situation;

The presence of problems of overproduction in the market for these products;

Demographic factors; » currency risk factors;

The possibility of introducing restrictions on the export from the country and the import into another country of products.

In addition, risk factors at the sales stage can be combined from factors of the first and second stages. Therefore, business risk at the distribution stage is considered higher than at the inventory or production stage.

In conditions of economic instability, the analysis of business risk at the time of issuing a loan significantly complements the assessment of the client’s creditworthiness based on financial ratios, which are calculated on the basis of average actual data of past reporting periods.

The listed business risk factors are necessarily taken into account when the bank develops standard loan application forms and feasibility studies for the possibility of issuing a loan.

The assessment of business risk by a commercial bank can be formalized and carried out using a scoring system, when each business risk factor is assessed in points (Table 2.2).

Table 2.2

Business Risk Criteria
I. Number of suppliers
more than three
II. Supplier reliability
All suppliers have an excellent reputation
most suppliers are reliable as business partners
the majority of suppliers are unreliable
III. Cargo transportation
within the city, there is an insurance policy, the type of transportation corresponds to the product
the supplier is distant from the buyer, there is an insurance policy, transportation corresponds to the product
the supplier is distant from the buyer, transportation may lead to the loss of part of the goods and a decrease in its quality, have an insurance policy
supplier within the city, transportation does not correspond cargo, there is no insurance policy, etc.
IV. Warehousing of goods
the borrower has its own warehouse premises of satisfactory quality or no warehouse premises are required
warehouse space for rent
warehouse space is required but not available at the time of business risk assessment

A similar model for assessing business risk is applied based on other criteria. Points are assigned for each criterion and summed up. The higher the score, the lower the risk and the greater the likelihood of completing the transaction with the predicted effect, which will allow the borrower to repay its debt obligations on time.

Determining the borrower's creditworthiness class

The client's creditworthiness class is determined on the basis of basic and additional indicators. The main indicators chosen by the bank must remain unchanged for a relatively long time. The document on the credit policy of the bank or others records these indicators and their standard levels. The latter are oriented towards international standards, but are individual for a given bank and a given period.

The set of additional indicators may be revised depending on the current situation. They can be used as an assessment of business risk, management, the duration of overdue debt to the bank, indicators calculated on the basis of the results account, results of balance sheet analysis, etc.

The client's creditworthiness class is determined based on the main indicators and is adjusted taking into account additional ones.

The creditworthiness class based on the level of key indicators can be determined using a point scale. For example: I class – 100-150 points; Class II – 151-250 points; III class – 251-300 points. To calculate scores, the class of the indicator is used, which is determined by comparing the actual value with the standard, as well as the significance (rating) of the indicator.

The rating, or significance, of the indicator is determined individually for each group of borrowers, depending on the policy of a given commercial bank, the characteristics of the client, the liquidity of their balance sheet, and market position. For example, a high share of short-term resources, the presence of overdue loans and non-payments to suppliers increase the role of the quick liquidity ratio, which assesses the ability of an enterprise to quickly release funds. Drawing the bank's resources into lending permanent inventories and understating the amount of equity capital increases the rating of the financial leverage indicator. Violation of the economic boundaries of credit, the “indebtedness” of clients put the level of the current liquidity ratio in the first place when assessing creditworthiness.

The overall assessment of creditworthiness is given in points. The scores are the sum of the products of the rating of each indicator and the credit class. 1st class is assigned at 100-150 points, 2nd class at 151-250 points and 3rd class at 251-300 points.

The same level of indicators and rating in points can be achieved due to various factors, some of which are associated with positive processes, and others with negative ones. Therefore, to determine the class, factor analysis of creditworthiness ratios, balance sheet analysis, and study of the state of affairs in the industry or region are of great importance.

The creditworthiness of small businesses can be assessed in the same way as the debt repayment ability of large and medium-sized borrowers - based on financial credit ratios, cash flow analysis and business risk assessment.

However, the bank's use of financial ratios and the cash flow analysis method is difficult due to the state of accounting and reporting of these bank clients. Foreign and Russian small businesses, as a rule, do not have a licensed accountant. In addition, audit costs are not available to these bank clients. Therefore, there is no audit confirmation of the borrower's report. For these reasons, the assessment of a client's creditworthiness is based not on his financial statements, but on the bank employee's personal knowledge of the client's business. The latter involves constant contact with the client: a personal interview with the client, regular visits to his enterprise.

During a personal interview with the head of a small enterprise, the purpose of the loan, the source and the period for repayment of the debt are clarified. The client must prove that the credited inventory will decrease by a certain date, and the credited costs will be written off to cost of goods sold. For frequent visits to an enterprise, the bank lends only to nearby companies.

Another feature of small enterprises should be noted - their managers and employees are often members of the same family or relatives. Therefore, it is possible to mix the owner’s personal capital with the capital of the enterprise. From this follows the following feature in the organization of bank credit relations with small businesses abroad (USA): loan repayment is guaranteed by the owner, namely his property. But in this regard, when assessing the creditworthiness of a small client, the financial situation of the owner is taken into account. The latter is determined on the basis of a personal financial report.

The personal financial statement form contains information about the assets and liabilities of an individual. In this case, pledged assets and secured liabilities are distinguished. Assets include cash, stocks and bonds, accounts receivable from relatives, friends and other persons, real estate, surrender value of life insurance, etc. Liabilities consist of debts to banks, relatives and other persons, debts on bills and taxes, the value of mortgaged property , payments under contracts, loans used for insurance payments, etc. For a more detailed analysis, a breakdown of individual types of assets and liabilities of an individual is given.

Thus, the bank’s system for assessing the creditworthiness of small borrowers consists of the following elements:

1. Business risk assessment.

2. Observation of the client's work.

3. Personal interviews of the banker with the owner of the enterprise.

4. Assessment of the owner’s personal financial situation.

The assessment of the creditworthiness of an individual is based on the ratio of the requested loan and his personal income, a general assessment of the financial situation and property, family composition, personal characteristics, and a study of the client’s credit history.

For example, in France, the creditworthiness of an individual is assessed using a scoring system. The program for determining the feasibility and conditions for issuing a consumer loan contains three sections: information on the loan and the client, and the client’s financial situation.

The first section contains information about the bank employee issuing the loan, the client’s file number, the name of the agency, the type and amount of the loan, the frequency of its repayment, the interest rate without insurance payments, the date of the loan, the day of the month chosen by the client for repayment, the answer to the question about the need for insurance, the absolute amount of monthly loan repayment with and without an insurance payment, the total amount of interest and insurance payments that will be paid to the bank. In the second section of the program, data is entered about the client’s profession, his membership in a certain social group, employer, net annual earnings, expenses for the year, and work experience. The third section - the client's financial situation - contains information about balances on current and savings accounts, the ratio of income and expenses. Based on entering the listed information, the bank employee receives a conclusion whether the loan can be issued. If the answer is negative, the bank agency may refer the client to its directorate for further consideration of the possibility of providing a loan.

In the United States, the basis for assessing the creditworthiness of an individual is the study of his credit history associated with the purchase of goods on credit in stores. The bank uses the information on the loan application: name, address, and social security number. Based on these three parameters, you can collect information from banks, credit card companies, and home owners about all cases of non-payment. The bank is interested in the number and size of non-payments that have occurred, the duration, and the method of repaying overdue debts. On this basis, a credit history is compiled.

In addition to credit history, the system for assessing the creditworthiness of an individual by American banks includes the following indicators: debt-to-income ratio, stability of income and duration of work in one place, duration of residence at one address, amount of capital.

Until recently, Russian banks, when assessing the creditworthiness of individuals, focused only on the financial aspect, in particular, the profitability of the borrower. Currently, for this purpose, the creditworthiness ratio is calculated as the ratio:

CCRED = ≤ 0.3

Today, in addition to this financial factor, banks also take into account others: social, professional, property, and a special banking factor.

· age of the borrower;

· profession;

· duration of work in one place;

· area of ​​employment;

· availability of real estate;

· presence of deposits in the bank;

· credit history, etc.

In my course work, I considered the most pressing topic at present, such as assessing the creditworthiness of the borrower. For a bank that specializes in issuing loans, assessing the creditworthiness of potential borrowers is the main function. That is, the financial position of the bank will depend on the quality of the client’s assessment. Reducing risk when performing loan transactions can be achieved on the basis of a comprehensive study of the creditworthiness of bank clients.

The creditworthiness analysis begins with a review of the loan application and an interview with the borrower. This makes it possible to find out not only the important details of the loan transaction, but also to draw up a psychological portrait of the borrower, assess the professional preparedness of the company’s management, the realism of their assessments of the situation and prospects for the development of the enterprise.

Before making a decision to issue a loan, the bank must characterize the financial situation of the borrower. It is determined on the basis of data on the activities of the enterprise, including the amount of equity capital, data on profitability, the structure of current assets, their turnover, the composition and structure of sources of working capital, etc. At the same time, it is important that not only data on their turnover and relationship between the turnover rate of various items of assets and liabilities.

Modern banking practice uses many ways to assess the financial situation of a borrower. Among them, the most recognized assessment is based on the analysis of financial ratios, combined into four main groups: indicators of liquidity, financial stability, business activity and operational efficiency.

But when using these coefficients, you cannot rely only on any one of these coefficients. All information received by the bank must be analyzed in essence, and the main result, the decision to issue or refuse to issue a loan, the bank must make on the basis of all the data.

Each bank that deals with loans has its own system for assessing creditworthiness. In some way, they all rely on certain methods, but each bank has its own priorities for lending to one or another area of ​​activity, therefore, as many banks exist, there are as many methods for assessing the borrower’s creditworthiness.

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2. Endovitsky D.A. Analysis and assessment of the borrower’s creditworthiness: educational and practical guide / D.A. Endovitsky, I.V. Bocharova. – M.: Knorus, 2005

3. Kirisyuk G.M. Bank’s assessment of the borrower’s creditworthiness // Money and Credit. 1993. No. 4.

4. Lavrushina O.I. Banking / ed.; 3rd ed., revised. and additional – M.: KNORUS, 2005

5. Lee O.V. On assessing the borrower’s creditworthiness (Russian and foreign experience) // Money and Credit - 2005, No. 4

6. Olshany A.I. Bank lending - Russian and foreign experience / A.I. Alder. M.: RDL, 1997.

7. Sevruk V.T. Analysis of the creditworthiness of a joint venture // Money and Credit, 1999, No. 3

8. Shalamov G.A. Credit history bureau as a tool for reducing banking risks // Banking - 2005, No. 4

9. Sheremet A.D. Methodology of financial analysis / A.D. Sheremet, R.S. Saifulin, E.V. Negashev. M.: INFRA-M, 2005.

11. Website of the Banking Analysts Club www.bankir.ru/

Banking / ed. O.I. Lavrushin; 3rd ed., revised. and additional – M.: KNORUS, 2005.

Sevruk V.T. Analysis of the creditworthiness of a joint venture // Money and Credit, 1999, No. 3. – p. 43

Olshany A.I. Bank lending - Russian and foreign experience / A.I. Alder. M.: RDL, 1997. – p. 51

Endovitsky D.A. Analysis and assessment of the borrower’s creditworthiness: educational and practical guide / D.A. Endovitsky, I.V. Bocharova. – M.: Knorus, 2005. – p. 36-38

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