THEORETICAL BASIS FOR ASSESSING THE CREDITWORTHINESS OF BANK BORROWER
Journal Title: Вісник соціально-економічних досліджень - Year 2018, Vol 1, Issue 65
Abstract
The article offers a scientific and practical approach to assess the creditworthiness of Ukrainian bank’s borrower. As a result of the conducted research, it is proved: 1) the existing problems of assessing the creditworthiness of borrower are based on banks’ attempts to make unsecured loans and do not create reserves for credit risk by their own expenses; 2) the potential creditworthiness of any borrower is zero and implies a 100% credit risk; 3) credit risk reduction and improvement of the borrower’s creditworthiness are only possible by taking of security under credit agreement by the bank; 4) the sum of a potential loan depends entirely on the amount of the security provided by the borrower under credit agreement; 5) the net credit risk has to be fully covered by the bank’s own expenses for the formation of reserves for this risk.
Authors and Affiliations
Oleksandr Syrchyn
Keywords
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- EP ID EP373673
- DOI 10.33987/vsed.1(65).2018.153-160
- Views 64
- Downloads 0
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