Account of foreign economic activity factor in determining the entity creditworthiness

Abstract

The article is devoted to the development of methodology for assessing the level of credit risk of borrowers-legal entities. The authors analysed the current methodology for determining the credit risk size under active banking operations used by Ukrainian banks. By analysing the statistical data on the share of problem loans in the loan portfolios of Ukrainian banks, it was established that the implementation of this methodology did not lead to a significant change in the share of problem loans in the banking system, and, consequently, needs further improvement. The article proposes the development of an approach to credit, which at the methodological level should be expressed through a set of interrelated quantitative and qualitative indicators, which in their unity determine the degree of creditworthiness of a potential borrower. The authors suggest taking into account the factor of foreign economic activity, as having a significant impact on the financial state of the enterprise, when calculating the integral indicator of the financial status of the debtor – a legal entity by including the indicator «the share of operating profit from foreign economic activities to depreciation in the total volume of sales». In addition, in the conditions of stable tendency of hryvnia devaluation, ranges of values of the debtor PD coefficient – the legal entity-exporter is proposed to be taken into account for the minimum values, and the legal entity-importer – for maximum values in determining the size of credit risk on an asset on an individual basis. The submitted offers will allow to adjust the level of credit risk of the borrower-legal entity that carries out foreign economic activity, depending on the importance of its impact on the financial result of the enterprise.