Determination of the risk limit for the banks' loans to the economic entities taking into account the industry and regional peculiarities

Abstract

This article examines the content of the system of bank lending. In the process of analyzing the current state of bank crediting the special attention is paid to the central problems faced by banks and borrowers, including the high credit risks, lack of long-term credit resources, low availability of the credits for enterprises of the real sector of economy, etc. Limiting the credit risk is considered as the main condition for ensuring credit repayment. Calculation of the credit limit is based on determining the borrower's credit rating using a system of quantitative and qualitative indicators of its activities, taking into account industry and regional characteristics. The proposed method of calculating the credit limit consists of three consecutive stages: evaluation of the creditworthiness of the borrower - is realized by calculation of values of financial indicators by the commercial bank using the data of financial statements of the borrower, comparison of them with normative values and assigning the creditworthiness class to the borrower according to values calculated; definition of credit rating on the basis of estimation of qualitative characteristics of the borrower; calculation of the credit limit with the use of discount rates.