How banks evaluate the creditworthiness of their customers. Development of forms of lending to individuals in the Russian Federation Checking credit history
Under the assessment of the borrower's credit risk is usually understood as the study and evaluation of qualitative and quantitative indicators economic situation borrower. The work on assessing credit risk in a bank is carried out in three stages:
assessment of the quality indicators of the borrower's activities;
assessment of quantitative indicators of the borrower's activity;
obtaining a summary assessment - a forecast and the formation of a final analytical conclusion.
The assessment of the client's creditworthiness is carried out on the basis of an analysis aimed at identifying objective results and trends in its financial condition.
The main sources of information for assessing the borrower's credit risk are: information provided by the borrower, the experience of other banks with this client, the scheme of the transaction being credited, and on-site inspection data.
The reputation of the borrower is studied very carefully, while the analysis of the client's credit history, that is, the past experience with the client's loan debt, is very important. Information characterizing the business and personal qualities of an individual borrower is carefully studied. The facts or absence of facts of non-payments on loans, etc. are also established. Determining the borrower's creditworthiness is an integral part of the bank's work to determine the possibility of issuing a loan.
The analysis of the borrower's creditworthiness is understood as the assessment by the bank of the borrower in terms of the possibility and expediency of granting loans to him, determining the likelihood of their timely repayment in accordance with the loan agreement. To this end, various techniques and methods are used.
The analysis of the client's creditworthiness is based on the collection of the necessary information that most fully characterizes the client, the main objectives of the analysis of which are:
identifying the strengths of the applicant's situation;
identifying the weaknesses of a potential borrower;
determining which specific factors are most important for successful loan repayment;
possible risks in lending.
In banking practice, direct and indirect methods of analyzing the creditworthiness of customers are distinguished.
Direct methods are rarely used. They assume that the amount of points scored by the client is actually equal to the amount of the loan to which he is entitled.
Indirect methods are widely used. Their essence lies in giving certain weights (points) to various evaluation indicators, and the result of the evaluation is the derivation of the client's creditworthiness class.
Based on the data obtained, the creditworthiness group of a potential client is determined:
excellent borrower;
insolvent.
However, it is not enough to find out the borrower's creditworthiness class. It is also important to determine the amount and term of the loan to which he is entitled. For this, a table of allowable amounts for issuing consumer loans as a percentage of the client's annual income is used.
In the process of analyzing the individual creditworthiness of individuals, it is important to use the credit scoring method very carefully, since, especially when issuing long-term loans, the situation in the process of executing a loan agreement changes greatly and there may be a serious risk of default on the loan. If the total score exceeds the amount specified in the model, then the bank provides the borrower with a loan, if it is lower than the named amount, then the loan is denied. Usually there is a certain gap between the minimum and maximum scores, and when the actual number of points falls within this gap, the bank makes a lending decision based on general economic and legal factors.
Obviously, the use of scoring systems for assessing the creditworthiness of customers is a more objective and economically sound decision-making process than the use of expert assessments. The only difficulty lies in the fact that customer credit score systems must be statistically carefully verified, and they require constant updating of information, which can be disadvantageous for banks. According to the results of the analysis of creditworthiness, the more points the client scored, the higher the level of his creditworthiness.
When conducting a creditworthiness analysis, banks pay special attention to assessing the personal qualities of the borrower. They can request the necessary certificates, including from the place of work of the borrower, and check the accuracy of the information provided in the client's questionnaire. If the banker revealed inaccuracies in the client's answers and came to the conclusion that the potential borrower deliberately misled the bank, then the client automatically receives a refusal to grant him a loan.
Capital valuation refers to the determination of the client's wealth. It is closely related to assessing the financial capacity of the client in terms of his ability to repay the loan along with normal day-to-day expenses and other debt obligations. For almost all consumer loans, the client's income is the main source of repayment. Therefore, the bank assesses the sufficiency of the client's own funds for the timely repayment of the loan after satisfaction of other claims and then compares this amount with the amount of periodic payments for repayment of the loan and interest on it.
Scoring systems can reduce costs and minimize operational risk by automating decision making, reduce the processing time for loan applications, and enable banks to carry out their credit policy centralized, provide additional protection financial institutions from fraud. At the same time, scoring also has a number of disadvantages: often the system's decision is based on the analysis of data provided exclusively by the borrower. In addition, scoring systems need to be constantly improved and maintained, since they take into account only past experience and react to changes in the socio-economic situation with a delay.
Credit scoring is a system for assessing the creditworthiness (credit risks) of a person, based on accrued statistical methods. As a rule, it is used in consumer (store) express lending for small amounts. It is also possible to use it in the business of mobile operators, insurance companies, etc.
Data for scoring systems are obtained from the probabilities of loan repayments by individual groups of borrowers, obtained from the analysis of the credit history of thousands of people. It is believed that there is a correlation between certain social data (the presence of children, attitudes towards marriage, the presence of higher education) and the conscientiousness of the borrower.
Credit scoring is a simplified system for analyzing a borrower, which makes it possible to reduce the qualification requirements for a loan officer involved in reviewing loan applications and increase the speed of their consideration.
When lending to individuals, a procedure for assessing their creditworthiness is also carried out, which can be carried out on the basis of the borrower's income level, a study of his credit history, as well as a standardized scoring.
The borrower's creditworthiness is assessed by income level based on data on the individual's income and the degree of risk of losing this income. Income is determined on the basis of salary certificates or a tax return, after which it is adjusted to take into account mandatory payments and bank risk ratios.
The creditworthiness of the borrower is the ability to make a deal to provide value on terms of repayment, urgency and payment, or, in other words, the ability to make a credit deal. Under control credit risk commercial banks use a set of criteria and indicators, the consideration and analysis of which make it possible to draw a conclusion about the level of creditworthiness of the borrower. A specific set of indicators characterizing the activities of an enterprise in different banks is not the same and changes in the process of developing credit relations.
The creditworthiness of the client in the world banking practice appears as one of the main objects of assessment in determining the feasibility and forms of credit relations. The ability to repay a debt is associated with the moral qualities of the client, his art and occupation, the degree of capital investment in real estate, the ability to earn funds to repay loans and other obligations.
The list of elements of the borrower's creditworthiness and indicators that characterize them may be broader or shorter depending on the objectives of the analysis, types of loans, loan terms, the state of the bank's credit relations with the borrower. The optimal or acceptable values of such indicators should be differentiated depending on the activity of the borrower, the specific terms of the transaction, etc. Today, there are several basic methods for assessing the creditworthiness of customers. The systems differ from each other in the number of indicators that are used as components of the overall assessment of the borrower, as well as different approaches to the characteristics and priority of each of them.
There are the following ways to assess the creditworthiness of individuals:
1) scoring models;
2) methodology for determining solvency;
3) underwriting.
The Bank applies each of the models for different types of lending and adjusts it on an individual basis. Scoring models are used mainly in the provision of loans for the purchase of goods (express loans) and in the issuance of credit cards.
Scoring is a mathematical (statistical) model by which, based on the credit history of existing customers, the bank determines how likely it is that a particular customer will repay the loan on time. Scoring highlights those characteristics that are most closely related to the reliability or, conversely, to the unreliability of the client.
The credit scoring technique is an assessment in points of characteristics that allow to determine with sufficient reliability the degree of credit risk when providing a consumer loan to a particular borrower. The most significant indicators for predicting credit risk may be such indicators as age, number of dependents, profession, income, cost of housing, etc.
The advantages of scoring models are obvious:
1) decrease in the level of loan default, speed and impartiality of decision-making;
2) & the possibility of effective management of the loan portfolio;
3) lack of long-term training for employees of the credit department;
4) the ability to conduct an express analysis of the loan application in the presence of the client.
However, despite the positive aspects, the use of credit scoring is associated with a number of difficulties.
One of them is that the evaluation characteristics are determined only on the basis of information about those clients to whom the bank has already provided a loan.
Another and most significant problem is that scoring models are built on the basis of a sample of the most "early" customers. Given this, bank employees have to periodically check the quality of the system and, when it deteriorates, develop a new model.
It should be noted that about ten characteristics are taken from the application form filled out by the borrower for evaluation, and the rest of the data is stored in the statistical database for further updating and scoring analysis.
Currently Russian banks evaluate such characteristics as income, number of dependents, ownership of a car (at the same time, a car of domestic and foreign production is distinguished, necessarily taking into account the period that has elapsed since its release), the presence land plot(its area and distance from the city center are considered), work experience, position, education.
Undoubtedly, today these are the main parameters by which it is possible to determine the degree of creditworthiness of an individual. However, continuous adjustment of the scoring methodology will expand and change the list of assessed characteristics, and those clients who today fall into the group of unreliable borrowers, in the subsequent analysis lending activities are likely to be classified as borrowers with low default rates.
A more complex and thorough assessment of the borrower is used when issuing loans to individuals for urgent consumer needs. These are, as a rule, medium-term loans for the purchase of expensive things, payment for any services and works. Examples include the purchase of expensive furniture, tuition fees, housing renovation financing, etc. In this case, many large commercial banks determine the solvency of the borrower on the basis of documents from the place of work on income and the amount of deductions, as well as according to the questionnaire. The result is calculated as the average monthly income minus all mandatory payments, adjusted by the adjustment factor and multiplied by the term of the loan. Based on the amount received, the maximum loan amount is calculated. The resulting value is adjusted taking into account the influencing factors: provided loan collateral, information contained in the conclusions of the security service and the legal department of the bank, the balance of debt on previously received loans.
To assess the solvency of the client, loan officers need to analyze a huge number of documents. Their list is quite large and includes about fifteen items. Their obligatory provision by the client, on the one hand, limits the circle of potential borrowers of the bank, and on the other hand, allows to form loan portfolio higher quality and reduce credit risk.
One of the advantages of this technique is the use of special formulas and adjustment factors that make it possible to simplify the work of the bank's credit department employees and calculate the solvency of a potential borrower. However, indicators for it should be obtained in each specific situation separately, and the result should not be considered as something that clearly indicates in favor or against the issuance of a loan. After all, even if at the time of consideration loan application the client's financial indicators are at an acceptable level, do not forget that the risk of non-repayment of the loan still remains, since it is impossible to completely eliminate it in principle. The indicators will only help to assess the degree of credit risk and, unfortunately, this technique does not allow predicting the position of the borrower in the future.
At mortgage lending individuals, the main way to reduce the bank's credit risk is to underwrite the borrower, which assesses the probability of repaying the loan, which involves analyzing the solvency of a potential client in the manner established by the bank, as well as making a positive decision on an application for a mortgage loan or refusing to provide a loan.
Mortgage lending to individuals in the bank is carried out by a fairly wide range of banking divisions: legal service, security service, department valuable papers, department of housing construction, etc. This indicates the degree of complexity and laboriousness of the underwriting procedure, the course of which each bank develops independently, choosing the evaluation criteria and conditions for granting mortgage loans.
The most important point in the underwriting process is the assessment of the client's solvency in terms of the ability to make timely payments on the loan. To perform this assessment, information is consolidated on employment and the receipt of income by the borrower, as well as on its expenses. After that, it is concluded whether he will be able to repay the loan. At the same time, an opinion is issued whether the pledged property is sufficient security for granting a loan or not.
In mortgage lending, bank employees include additional quantitative and qualitative characteristics in the methodology for determining the borrower's creditworthiness and the amount of credit risk.
Among the quantitative characteristics - the ratio of the total amount of monthly obligations of the borrower to the total family income for the same period, as well as the sufficiency of funds (based on maintenance costs).
Qualitative characteristics include the borrower's income, employment stability, credit history, credit security, etc.
Evaluating the underwriting methodology, we can conclude that a systematic approach is applied to the analysis of the borrower. The positive side of the methodology is the ability of the bank to develop an individual approach to any potential borrower, within which the required number of characteristics will be taken into account. The disadvantage of this assessment is the laboriousness of its implementation, which requires special qualifications of bank employees. Most banks prefer to compensate for credit risk by raising interest rates. Other methods are also used, the application of which does not require large expenditures of time and labor.
It should be noted that the understanding of the expediency and relevance of using more advanced methods occurs most often in those banks in which lending to individuals is implemented as a mass service.
If the bank plans to launch a large-scale program, then in order to succeed in the market in the face of constant toughening of competition and, as a result, a decrease in profitability, it is necessary to look for ways to reduce operating costs and minimize risks.
A prerequisite here will be the correct construction of the mechanism that will carry out this activity. Figuratively speaking, it is necessary to create a kind of pipeline consisting of a certain number of employees interacting with borrowers and among themselves according to certain clearly defined rules and algorithms. Such algorithms include methods for analyzing applications and making decisions on issuing a loan.
So, consumer lending operations are one of the most profitable items in the banking business. Due to this source, a significant part of net profit can be formed. credit institution deducted to reserve funds and used to pay dividends to shareholders of a commercial bank.
Consumer lending operations are promising and attractive for commercial banks, and, therefore, it becomes important to develop a set of measures to reduce the level of credit risk and manage it. Credit risk management is based on identifying the reasons for the inability or unwillingness of the borrower to fulfill its obligations and determining methods to reduce the level of risk. The purpose of credit risk management is to reduce the likelihood of a borrower defaulting on its obligations under a loan agreement and minimizing the financial losses of a commercial bank in the event of a loan default.
The assessment of the client's creditworthiness is carried out in the credit department of the bank based on information about the client's ability to receive income sufficient to repay the loan on time, about the borrower's property, which, if necessary, can serve as collateral for the issued loan, etc. In addition, a bank employee is obliged to analyze market conditions, trends in its change, the risks experienced by the bank and its client, and other factors. Sources of information about an individual borrower can be information from the place of work, place of residence, etc.
The assessment of the creditworthiness of an individual is based on the ratio of the loan requested by the borrower and:
Borrower's personal income;
General assessment of the financial position of the borrower;
The value of his property;
Family composition;
Personal characteristics;
Credit history.
When assessing the creditworthiness of individuals, banks, as a rule, are guided by their internal regulations. However, there are 4 main methods for assessing the creditworthiness of an individual by a commercial bank:
Scoring (point) assessment of creditworthiness;
Creditworthiness assessment by solvency (income level)
Assessment of creditworthiness by credit history;
Underwriting.
2.4 Scoring (score) assessment of creditworthiness
In all countries with a developed system of financial services, loans are issued only to those borrowers who have passed a special credit assessment procedure called credit scoring. Currently, many Russian banks apply a formal approach to assessing the creditworthiness of individuals. This approach is based on determining the possibility of repaying the loan, based on the amount of the client's income. The decision on the issue of granting a loan and consideration of the terms of credit are carried out by the credit committee of the bank. At the same time, these decisions are based on the subjective opinion of individual members of the credit committee on the risk of lending to certain categories of individuals and do not always reflect the real picture. It is possible to solve these problems with the help of analytical data processing methods that implement a scoring mechanism for assessing the creditworthiness of borrowers.
Credit scoring is a fast, accurate and sustainable credit risk assessment procedure that has a scientific basis.
Scoring is a mathematical or statistical model that correlates the level of credit risk with the parameters that characterize the borrower - an individual or entity. There are many scoring models, each of them uses its own set of factors that characterize the risk associated with lending to a borrower, and as a result receives a threshold score, which makes it possible to divide borrowers into “bad” and “good”. The meaning of credit scoring is that each applicant for a loan is assigned a unique credit risk assessment. Comparison of the credit scoring value obtained for a particular borrower with a threshold score specific for each scoring model helps to solve the problem of choice when issuing a loan, dividing borrowers into two classes (those who can be granted a loan, and those to whom it is “contraindicated”). Applying credit scoring gives banks the following:
Reducing the risk of loan default, reducing the number of "bad" loans and, accordingly, reducing the level of overdue debt;
Increase in the loan portfolio by reducing the number of subjective refusals on loan applications;
Speeding up the process of making decisions on issuing a loan;
Ability to create specific loan products based on the analysis of market niches;
Assistance to loan officers and analysts by providing them with information support in making decisions.
The task of assessing the creditworthiness of individuals is an informal task. To solve this problem, it is advisable to use hybrid expert systems. The assessment task can be represented as:
where M is a comprehensive assessment of the object;
X - a set of indicators characterizing the state of the object;
K - a set of criteria by which the values of indicators are evaluated and M is calculated (criteria can be quantitative or qualitative, it depends on the nature of the indicators of the object's activity); F is a certain function, according to which, based on the values of primary indicators and criteria, it is possible to obtain a generalized assessment of the object. The function is not formalized and may not be fully known. To solve the estimation problem, it is necessary to restore the form of the function F. The use of a hybrid model implies the decomposition of the problem into subtasks.
The developed model of the scoring system consists of five blocks: social position;
2) economic situation;
3) property status;
4) parameters of the credit transaction;
5) assessment of business reputation.
Each block of the model is characterized by a corresponding set of indicators that determine the state of the client-borrower from various angles, and a solution method. The values of the indicators are determined based on the borrower's questionnaire (see Appendix 3) and the conclusion of the bank's security service. The value of each model block is determined by one of the available solution methods, namely:
formula;
neural network;
Productive expert system.
In the "Social status" and "Economic status" blocks, a neural network is used as a solution method, since in these nodes it is impossible to unambiguously determine the degree of influence of the factors included in these blocks on the final indicator. In addition, there is a significant data sample for training the neural network in these nodes.
Social status
Family status
Family Composition
dependents
education
Rice. 1. Block "Social status" of the scoring system model
In the blocks "Property status" and "Evaluation of business reputation" it is advisable to use a production expert system. This method allows you to get the values of the named blocks using rules similar to the reasoning of experts
In the "Parameters of a credit transaction" block, the solution method is a formula. This block serves for a comprehensive assessment of the creditworthiness of an individual by determining its solvency (creditworthiness based on income) and the maximum amount of credit provided to it. The use of this node (or block) in the developed scoring model allows you to combine the traditional approach to determining creditworthiness and a qualitatively new one based on a hybrid expert system.
The final assessment of the creditworthiness of an individual is determined by the formula:
Z \u003d 0.15X1 + 0.3X2 + 0.25X3 + 0.3X4,
where Z - credit rating;
X1 - social position;
X2 - economic situation;
X3 - property status;
X4 - assessment of business reputation;
0.15; 0.3; 0.25; 0.3 - weight coefficients of the relevant risk factors that determine the creditworthiness of the borrower.
The work of the scoring system for assessing an individual should be carried out in the "black box" mode. All the data necessary for analysis (from the salary certificate, the borrower's questionnaire) are entered into the bank's ABS. To assess the creditworthiness of the borrower, the list of indicators and their values are transferred to the analytical unit, which, based on the result of the analysis according to the configured "decision tree", returns the borrower's quality category to the Bank's ABS. This scheme is shown in Figure 7. For a loan officer preparing a conclusion on granting a loan, the analysis process is presented only in the form of a quality category assigned to the client (probability of default by the borrower), on the basis of which the loan amount is adjusted, or lending is denied. In addition, depending on the quality category assigned to the client, it is possible to provide the bank with recommendations on the terms of lending (in terms of loan amount, loan term, amount of loan repayment security). To solve the problem, a universal hybrid tool is needed, which includes mechanisms for forming and setting up a decision tree, various methods for analyzing information, mechanisms for preprocessing data. The proposed mechanism for assessing the creditworthiness of an individual is implemented in an analytical information system
This approach to assessing creditworthiness in the conditions of Russian reality encounters the following problems:
Currently in Russia there is not enough information available for research on the creditworthiness of this or another group of the population, that is, there is no so-called "credit cemetery";
The creditworthiness of an individual depends not only on its observable characteristics, but also on the general macroeconomic situation;
A significant increase in the volatility of borrowers' income with their growth in absolute value;
In Russia, a creditworthy is an individual who not only fulfilled his obligations, but also replaced obligations to one creditor with an obligation to others;
Decisions made earlier using a credit scoring system affect decisions made by that system or another system later.
2.5 Assessment of creditworthiness by solvency
Solvency indicators are calculated on the basis of data on the income of an individual and the degree of risk of losing this income. It is practiced to calculate the solvency of the borrower based on the average monthly income for the previous six months. Income is determined from a salary certificate in the form of 2-NDFL or in the form of a bank certified by the seal of the employer. The borrower's income can also be determined from a tax return. The amount of income is reduced by mandatory payments and multiplied by the risk factor of the bank (may be in the range of 0.3-0.6)
Russian banks, in particular Sberbank, use similar valuation methods in their practice. The method of calculating the solvency and the maximum loan amount by this method.
economic sciences
- Fattakhova Diana Nadimovna,
- Bashkir State Agrarian University
- INDIVIDUAL
- SCORING METHOD
- BORROWER
- CREDIT POSITION
This article discusses the method of scoring the creditworthiness of an individual, as well as the methodology for assessing creditworthiness based on financial indicators solvency of the borrower on a specific example
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The essence of credit scoring is that all the data that the client enters when filling out the proposed questionnaire has a score. This technique allows you to visually evaluate all the characteristics of a potential borrower.
We will consider the methodology for scoring the creditworthiness of a client in the Bank using the example of a hypothetical citizen Sergey Dmitrievich Ivanov, who applied to the bank for a cash loan, currently issued at a rate of 16 percent per annum, in the amount of up to 1 million rubles. for a period of 1 to 3 years without the requirement of security or guarantee. The desired term for using the loan is 1 year, the requested amount is 100 thousand rubles.
To simplify, with regard to citizen Ivanov S. D., we will make the following assumptions, confirmed by the documents provided by citizen Ivanov:
- age - 28 years old, has no family and dependents, lives alone;
- has an official place of work at a trade enterprise as a leading specialist in the supply service, with the exception of income at the place of work - has no other sources of income;
- legal capacity of citizen Ivanov S. D. confirmed;
- earlier, Ivanov S. D. did not apply to the bank for a loan;
- served in the Armed Forces of the Russian Federation;
- the average monthly income for the last 6 months is 37 thousand rubles, documented;
- monthly expenses exceed 50% of declared income, fixed payments (rent, education, alimony, etc.) are absent;
- owns an apartment, the market value of which is the equivalent of 40 thousand US dollars, has not made real estate transactions or other major transactions for the purchase and sale of property in the last 5 years.
The minimum requirements that, in accordance with the methodology, must
appropriate borrower (primary borrower and guarantor) are listed in Table 1 and may be changed within any loan product by the Credit Committee of the Bank.
Table 1. Mandatory requirements for borrowers
Age from 21 to 60 years |
|
Permanent registration on the territory of the lending branch of the bank |
|
Labor activity in the territory of the lending branch of the bank |
|
Officially formalized employment relationship with the employer, documented |
|
Work experience for at least 1 year |
|
No negative credit history |
|
The monthly level of income reflected in the borrower's questionnaire is not less than 350 US dollars |
|
For female applicants, the age of the child, if any, is at least six months |
|
For male applicants under the age of 27 no problems with service in the Armed Forces |
Further, the data specified by the borrower is processed and then the borrower's score is formed, which consists of points. According to the number of points, the bank employee makes a conclusion and attaches them to the rest of the documents, only after that the bank makes a decision on granting a loan or refusing it.
If we rely on the data of citizen Ivanov S. D., then we can conclude that the loan will be approved for him, since he meets all the mandatory requirements of the bank, does not have credit debts, receives a stable wages and owns an apartment.
Thus, scoring does not answer the question why the borrower does not pay. He highlights those characteristics that are most closely related to the unreliability or, conversely, the reliability of clients of a certain age, a certain profession, education, the same number of dependents, etc. This is the discriminatory nature of scoring: a person who is formally close to a group with a bad credit history will most likely not be able to get a loan.
Methodology for assessing the creditworthiness of an individual based on financial indicators of its solvency
Solvency indicators are based on data on the income of an individual and the degree of risk of losing this income. Commercial Bank when issuing a one-time loan, it calculates the solvency of an individual borrower on the basis of data on the average monthly income for the previous six months, which is determined by reference 2 - personal income tax.
As we already know, the average monthly income of citizen Ivanov S.D. over the past six months is 37 thousand rubles. Next, we must adjust income by a factor that differentiates depending on the amount of income (from 0.3 to 0.6).
A coefficient equal to 0.3 is assigned to a citizen with an average monthly income of up to $500, a coefficient of 0.4 - with incomes in the equivalent of $501 to $1000, a coefficient of 0.5 - with incomes in the equivalent of $1001 to $2000, and a coefficient equal to 0.6 - with incomes in the equivalent of more than $ 2,000.
To find out what coefficient should be applied to the income of citizen Ivanov S. D., it is necessary to convert his average monthly income into the equivalent to the US dollar.
For this, 37,000 / 59.1128 (the US dollar exchange rate according to the Central Bank of the Russian Federation on March 16, 2017) = $625.922. Therefore, we apply a factor of 0.4.
R \u003d D × K × I,
P \u003d 37,000 * 0.4 * 12 \u003d 177,600 rubles.
Thus, for 12 months, citizen Ivanov S. D. can repay a loan in the amount of 177,600 rubles.
So, citizen Ivanov S. D. is a solvent borrower and may well qualify for approval of a loan from a bank. Many factors that are taken into account when assessing the creditworthiness of an individual play in its favor:
- has a stable income of over $ 350, documented;
- owns an apartment, the cost of which is equivalent to 40 thousand US dollars;
- has no credit debts;
- meets all mandatory requirements of the borrower;
- the solvency of citizen Ivanov S. D. is 177,600 rubles per year.
After analyzing two methods for assessing the creditworthiness of individual borrowers, we can conclude that the method of scoring the creditworthiness of an individual borrower is the most popular both among banks in Russia and in banks in other countries. First of all, this is due to the fact that, using this method, banks can cover more detailed information about the borrower: biography; credit history; property he owns. The methodology for assessing the creditworthiness of an individual based on the financial indicators of his solvency is also an integral part of assessing the creditworthiness of the borrower, since the ability to repay the loan is calculated based on his income. However, this method is not as popular among banks as scoring is.
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Introduction ……………………………………………………………………………….. 3
Chapter 1. Theoretical foundations of the organization of lending to individuals in a bank………………………………………………………………………………………..…5
1.1. Essence and principles of lending to individuals………………………..…5
1.2. Classification of loans provided to individuals..………...…...8
Chapter 2. Analysis of existing methods for assessing the creditworthiness of individuals. ……………………………………………………………………………………..fifteen
2.1. Foreign experience in assessing the creditworthiness of individuals …………….15
2.2. Russian practice of assessing the creditworthiness of individuals …………17
Chapter 3. Analysis of the Primorsky Branch of the SZB of the Russian Federation for lending to individuals and improving the assessment of their creditworthiness ........................................................................................................
3.1. Characteristics of the Primorsky Branch of the Security Council of the Russian Federation and the procedure for lending to individuals SZB of the Security Council of the Russian Federation…….…………………………………………………………..22
3.2. Practical calculations for determining the solvency of individuals ....33
3.3.Improving the assessment of the creditworthiness of individuals…………………………………………………………………………………………36Conclusion……………………… ………………………………………………………46
References ………………………………………………………………...…48
Introduction
The relevance of the topic of this study is determined by the following.
Development Features banking system, in particular the Russian one, are of great importance for understanding the evolution of the formation of the concept of "creditworthiness", the disclosure of the economic meaning invested in this concept. A retrospective assessment of the development of credit relations in Russia may cease to be considered as such.
The concept of creditworthiness first appeared in the economic literature of the 18th century. In their writings, it was used by A. Smith and D. Keynes,
N. Bunge and V. Kosinsky. Of course, even before that time, lenders were interested in the ability of borrowers to make credit transactions, but attempts at such an assessment were of an unsystematic, fragmented nature. The lack of an integrated approach in this area was not very well compensated for by the search for individual components in all periods of the development of banking. It entered the economic literature as an assessment of the borrower's creditworthiness, which in modern conditions indicates the relevance of the chosen topic.
The purpose of the course work is to assess the creditworthiness of the borrower and develop a methodology for lending to individuals.
To achieve this goal, the following tasks are formulated:
1) consider the concept of the borrower's creditworthiness and methods for its assessment;
2) analyze the organization of lending and the current assessment of the creditworthiness of the borrower in the bank;
3) develop ways to improve the assessment of the borrower's creditworthiness in a commercial bank, including the development of a methodology.
The methodological basis of the study is made up of general scientific methods of cognition: dialectical, historical and legal, logical, study of documents, method of a systematic approach, normative.
The structure of the course work consists of an introduction, three chapters, a conclusion and a list of references. The first chapter of the work "The concept of the creditworthiness of the borrower and methods of its assessment" considers the essence, types and forms of credit, the methodology for assessing the creditworthiness of the borrower. In the second chapter of the work “Analysis of the organization of lending and assessing the creditworthiness of the borrower of the SSB of the SB of the Russian Federation, the activity of the studied commercial bank is characterized and the procedure for assessing the creditworthiness of its borrowers is analyzed. The third chapter "Ways to improve the assessment of the creditworthiness of the borrower" presents specific proposals for improving the organization of lending and methods for assessing the creditworthiness of borrowers in the current financial crisis that has affected the Russian banking system.
The object of study in this paper is the commercial bank SZB SB RF.
The subject of the study is the creditworthiness of clients (individuals) of this commercial bank.
The main sources of information used in writing the work were regulatory documents governing the assessment of borrowers' credit risks, educational literature on the problem under study (works by E.F. Zhukov, O.I. Lavrushin, V.M. Usoskin, etc.), materials periodicals and electronic media.
Chapter 1.Theoretical foundations for organizing lending to individuals in a bank
1.1. The essence and principles of lending to individuals
The role of credit in the economy is based on a certain methodological basis, one of the elements of which are principles, strict sanctions, loans, as well as bank control over the observance of this condition by the borrower. There is a principle called the differentiated nature of the loan. It defines a differentiated approach on the part of a credit institution to various categories of potential borrowers.
The totality of credit relations functioning at the international level, the direct participants of which can be transnational financial and credit institutions (IMF, IBRD, etc.), governments of the respective states and individual legal entities, including credit organizations, is considered.
Lending to individuals is primarily due to the following reasons: 1
Monetary incomes of the population form its solvency, which often does not correspond to consumer demand. The need to purchase certain goods outstrips the possibility of their financial coverage, that is, there is a gap between the current cash income of the population and the relatively high prices for durable property (house, dacha, car, etc.). At the same time, some segments of the population have temporarily free funds. Thus, the emergence of consumer credit resolves the contradictions between the relatively high prices for durables and current incomes for one group of the population and the need to use them for another;
The need for unimpeded sale of goods by the manufacturer. At the same time, the connection consumer credit and retail trade is direct, that is, with an increase in turnover, the volume of credit grows, since the demand for goods generates demand for credit. This relationship becomes especially close when the market is highly saturated with goods.
People can borrow cars, refrigerators, radios, televisions, furniture and other items on credit. The subjects of the loan, on the one hand, are lenders, in this case, these are commercial banks, special consumer credit institutions, shops, and other enterprises. On the other hand, these are borrowers - people.
Lending by banks to the population allows not only the rational use of temporarily free cash contributors, but it is also of great social importance, as it helps to meet the vital needs of the population in housing, various goods and services.
Currently, bank loans can be classified according to a number of criteria: 2
By type of borrower, loans can be grouped as follows: loans to enterprises, loans to state authorities, loans to the population, loans to banks.
Purpose: consumer credit, industrial credit, trade credit, agricultural credit, investment credit, budget credit.
Depending on the area of operation, loans provided to business entities are divided into: loans involved in the reproduction of fixed assets, loans involved in the organization of working capital (loans directed to the production sector, loans serving the circulation sphere).
According to the size of loans are divided into: small, medium, large.
By terms of use: on demand, term (short-term - up to 1 year, medium-term - from 1 year to 3 years, long-term - over 3 years)
According to the method of issuing loans, they are divided into: compensation, when the loan is sent to the borrower's current account to reimburse him for his own funds invested by him in inventory or costs;
Payment, when the loan is directed directly to pay for settlement and monetary documents presented to the borrower for credited activities. In addition, loans can be issued: at a time or in installments; in cash and non-cash form; with or without specification of the goal;
By repayment method: loans repaid at a time; loans repaid in installments.
By type of security: unsecured (blank) loans; secured loans (collateral, guaranteed, insured).
A blank (trust) loan does not have specific collateral and therefore is provided, as a rule, to first-class borrowers with whom the bank has long-term ties and has no claims on previously issued loans. Typically, such a loan is issued for a short period (1-3 months) and, since it is not secured by appropriate obligations, interest rate higher than for other loans. However, due to the instability of the country's economic development, inflationary and other negative trends in the monetary sphere, these loans did not receive serious development.
According to the method of granting: overdraft loan 3 is a short-term loan, which is provided by debiting funds from the client's account, in excess of the balance on the account. As a result, a debit balance is formed on the client's account. An overdraft is a negative balance on a client's current account. An overdraft may be permitted, i.e. previously agreed with the bank and unauthorized, when the client issues a check or payment document without having the bank's permission to do so. Overdraft interest is calculated daily on the outstanding balance, and the client pays only for the amounts actually used by him. Current account loan: issued when using a current account, which is opened to customers with whom the bank has a long-term relationship of trust, companies with an exceptionally high credit reputation.
Thus, a bank loan is one of the main types of credit, and therefore banks should look for clear and precise criteria for assessing the borrower's creditworthiness as a method of reducing credit risks.
1.2. Classification of loans provided to individuals
Credit operations occupy the most important place in the balance sheets of most commercial banks. All this requires bank managers to develop methods and conditions. In practice, the credit policy is an official document that sets out the directions of the bank's lending activities. The credit policy is developed by the board of directors of the bank, and it is through it that the powers are delegated to the executors - employees of the credit departments. Credit policy of credit administration. Differences in such documents arise from the specific features of a particular bank: its goals, markets, financial structures, size, intensity of the competitive situation, staff experience. Therefore, each bank must develop an individual policy that reflects precisely its specific needs.
Methods should be applied in a complex, mutually complementing, but not duplicating each other. Thus, the reserve should not be created for secured loans, the interest rate should decrease with an increase in the amount of collateral, etc. The main requirement for the risk management system in a bank is to ensure an acceptable level of financial stability of the bank. But at the same time, it is necessary to take into account the level of the bank's credit policy in modern conditions. No matter how familiar this work would be for a modern bank, in practice there is still an identification of two concepts of creditworthiness, when both quantitative and qualitative analysis is done - that is, its assessment. Despite the long history of credit relations, there is no single credit policy for all banks, just as there is no single approach to assessing the creditworthiness and solvency of the borrower. Each bank evaluates creditworthiness, namely, there is a transition from assessing current creditworthiness to planned, forecasted, i.e. calculated for the near future. World and domestic practice distinguishes two evaluation analyzes. The analysis is usually carried out in two directions.
