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The purpose of this research is to explore and summarize aspects of the current state and development trends in Albania's banking sector. The analysis shows that the banking system dominates the country's financial landscape, while the securities market remains nascent. Adverse inflationary dynamics are also observed. The research demonstrates dependencies between key banking indicators like non-performing loans, capital adequacy ratio and money supply on economic factors. The prospects for Albania's banking sector are challenged by the volatile global economy, however promoting lending, improving asset quality and supporting businesses can help establish stability. Expanding the securities market can also assist banking sector growth. The practical significance is that the identified trends and relationships can inform policy decisions to facilitate robust banking sector performance. [ABSTRACT FROM AUTHOR]

This study investigates the impact of credit reference bureau (CRB) procedures on the performance of loan portfolios at selected commercial banks in Tanzania. A cross-sectional research design was adopted, with data collected through questionnaires and interviews involving 95 respondents from selected commercial banks. The findings show that the procedure to accessing loans had a positive and significant relationship with loan portfolio performance at these banks (β = 0.835, p = 0.000), as did loan approval procedures (β = 0.789, p = 0.001) and quality control procedures (β = 0.768; p = 0.002). All were significant at 5% level. The study concludes that using credit reference bureau services allows banks and other credit providers to assess potential clients, track their financial performance, and manage any accumulated debts. The study recommends that the government of Tanzania work closely with listed commercial banks and other financial institutions to ensure compliance with legal requirements specifically policies and procedures that assist in screening and monitoring clients from the initial stage of lending by using credit reference bureau procedures to improve decisions on loan provision. [ABSTRACT FROM AUTHOR]

Copyright of Economic Series of the Bulletin of the L.N. Gumilyov ENU is the property of L.N. Gumilyov Eurasian National University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Historia i Polityka is the property of Nicolaus Copernicus University in Torun and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

One of the most critical aspects of credit risk management is determining the capital requirement to cover the credit risk in a bank loan portfolio. This paper discusses how the credit risk of a loan portfolio can be obtained by the stochastic recovery rate based on two approaches: beta distribution and short interest rates. The capital required to cover the credit risk is achieved through the Vasicek model. Also, the Black-Scholes Merton model for the European call option is utilized to quantify the Probability of Default (PD). Value at Risk (VaR) and Conditional Value at Risk (CVaR) are used as measures of risk to evaluate the level of risk obtained by the worst-case PD. A stochastic recovery rate calculates VaR related to the underlying intensity default. In addition, the intensity default process is assumed to be linear in the short-term interest rate, driven by a CIR process. The loan portfolio performance is evaluated by considering the relevant characteristics with the Data Envelopment Analysis (DEA) method. This study proposes the losses driven by the stochastic recovery rate and default probability. The empirical investigation uses the Black-Sholes-Merton model to measure the PD of eighth stocks from different industries of the Iran stock exchange market. [ABSTRACT FROM AUTHOR]

The NPAs are considered as an important parameter to judge the performance and financial health of banks. The level of NPAs is one of the drivers of financial stability and growth of the banking sector. This research explores an empirical approach to the analysis of Non-Performing Assets (NPAs) with special reference to different banks. NPAs adversely affect lending activity of banks as non-recovery of loan instalments as also interest on loan portfolio. Non - recovery of loans also hurts the profit ability of banks. The outcome of the study would help the concerned more particularly the managers of banks to device appropriate management strategies to have NPA within the manageable limit to keep the performance of the banks in a healthier condition. To analyse and minimize the risk involved in different sectors of NPA. [ABSTRACT FROM AUTHOR]

The banking sector is one of the most important components of the financial sector. The development of the credit services market is one of the indicators of the economic development of any country. Thanks to credit operations provided by banks, legal entities and individuals can attract additional monetary resources for their needs. Due to the corona crisis, banks around the world suffered certain losses. In 2022, Ukraine faced new challenges due to a military invasion that caused an economic crisis. However, the banking system of Ukraine continues to operate efficiently despite the risks and crisis situation. The article examines the basis of the problem of bank lending. It was determined that with the increase in the volume of loans granted, the number of loans not returned by borrowers also increases, which in turn leads to a lack of monetary resources and, as a result, affects the level of interest rates on loans. It is indicated that one of the reasons for the increase in loan rates is the attraction of expensive resources. It is suggested that commercial banks of Ukraine control these risks, which will make it possible to ensure the quality of the credit portfolio. Also, a significant problem in the field of bank lending is defined as the lack of legal support for its implementation.

The study examines the current topic of bank lending in modern Ukrainian conditions. By analyzing the dynamics of credit activity and the financial condition of banks in Ukraine, the work reveals the main problems affecting this sector, such as a large share of non-performing loans, a decrease in the share of long-term loans, and a high lending rate. The conclusions of the work provide recommendations for improving the situation on the lending market in Ukraine. The modern economy of Ukraine is experiencing complex challenges related to the war in Ukraine, which was preceded by the COVID-19 pandemic and the global economic crisis. In this context, the article examines the role of credit as a key driver of economic stability and post-victory recovery. The study is based on the analysis of available data and literature sources, and also uses empirical methods to determine the impact of lending on economic recovery. The article highlights key aspects of lending, such as the role of banks, loan volumes, interest rates and overdue loans. The results of the study emphasize the importance of the development of the financial sector and the promotion of credit availability for enterprises and the population in the context of the economic recovery of Ukraine. The authors provide practical recommendations for the government and regulators to improve the credit environment and stimulate investment activity. This article is aimed at opening discussions and promoting further research into the role of lending in stimulating the economic recovery of Ukraine in the face of today's extremely complex challenges and may be useful for economists, theoreticians and practitioners. The scientific study analyzes how lending can affect the financial stability of Ukraine, in particular, how it can reduce financial risks and contribute to the stability of the economy. The impact of credit availability for various areas and sectors of the economy is considered. The article offers an important contribution to understanding and improving the effectiveness of lending as a tool for the economic recovery of Ukraine, emphasizing the need for a coordinated approach to this issue, taking into account the unique challenges and opportunities that exist at this stage of the country's development.

The article explores the theoretical and methodological aspects of managing the loan portfolio and credit risks of a commercial bank in the context of the need to stimulate investment processes in the economy. The article considers the essential characteristics of the loan portfolio of a commercial bank and allocates its key features with clarification of their economic content in terms of the qualitative aspect of formation and management of the pool of credit assets. The study examines current approaches to assessing the credit portfolio of a commercial bank, taking into account its key characteristics. Indeed, based on the results of monitoring the quality of the credit portfolio, it is possible to formulate a set of proposals for managing credit assets and assess the adequacy of measures implemented by the bank's management in the face of economic uncertainty to maintain competitive positions on the credit services market. A review of the dynamics of lending to non-financial corporations and households by maturity is carried out through the prism of the potential use of these borrowed financial resources to intensify the investment activity of economic entities. [ABSTRACT FROM AUTHOR]

The aim of the article is to identify problematic issues of valuation of property (assets) of banks that are in the process of liquidation, and substantiate proposals for the desired solution, taking into account the need to protect the rights of bank creditors. Although the bankruptcy of banks causes significant economic and moral losses, the processes of removing insolvent banks from the market, their reorganization or liquidation are constantly taking place. Therefore, regulators and banks that have been declared insolvent face many questions, including the adequate valuation of banking assets and the determination of the liquidation estate. The article discusses approaches to asset valuation and features of their application in Ukrainian practice, as well as peculiarities of the sale of assets of banks in liquidation according to the Dutch auction model. It is noted that the imperfection of management of banks’ assets in the process of their functioning leads to discrepancies in the valuation of these low-quality assets in the liquidation procedure. It is determined that the ratio between the estimated value of assets and their book value for banks declared insolvent is on average 26.2 %, and the median value is 22.3 % This leads to a number of problems, including the inability of the Deposit Guarantee Fund (DGF) to ensure the repayment of part of the bank’s liabilities, which could be repaid in case of timely acceptance of tender offers at market value. It is noted that the most liquid assets, which are real estate and property, occupy an insignificant share in the structure of the liquidation mass – about 5 %, and the conversion rate in the sale of real estate quite often reaches 200 %. It is proposed, in accordance with European practice, to empower the Fund to monitor the assets of banks in the process of their functioning. The expediency of valuating assets not from the position of doing business «as usual» but from the point of view of the objective need to sell assets, focusing on the quick sale of assets at a market price, is emphasized. In order to improve the process of valuating the assets of an insolvent bank and focusing on the quick and transparent sale of the bank’s assets, it is proposed to implement the international experience of using loss-sharing agreements into domestic practice.

Accurate forecasting of consumer loan market behavior gives banks a huge potential to optimize their credit strategies by proactively adapting to external changes. This study aims to analyze and predict consumer loan demand, supply, and profitability in the Ukrainian banking sector. Using a systemic dynamic approach, the interplay of five key factors is considered: central bank policies, GDP fluctuations, changing competitive landscape driven by FinTech companies, investment in government bonds as an alternative to loan granting, and severity of credit risk management.The developed dynamic model for the bank consumer loan market in Ukraine offers predictive capabilities enhancing decision-making and strategic planning in the banking sector and can be adapted in open small economies. Within the proposed systemic dynamic model, five scenarios were explored. Compared to the base scenario, a 4 p.p. increase in the key policy rate results in UAH 4.7 billion decrease in demand for bank consumer loans and a UAH 0.55 billion reduction in lending profitability based on the year’s results. Fall in GDP by 6 p.p. leads to a decrease in the supply of bank consumer loans by UAH 6.9 billion and a decrease in lending income by UAH 1.3 billion based on the year’s results. Scenario with the decline of FinTech portfolio by 20 p.p. quarterly leads to an increase in demand for bank consumer loans of UAH 8 billion. A 4 p.p. rise in government bond yields leads to a UAH 17 billion reduction in the supply of consumer loans in the same quarter.

The purpose of the study is to develop effective ways to solve the problems of managing the quality of the loan portfolio of the Ukrainian banking sector in the context of the financial crisis caused by the russian-Ukrainian war. In the course of the study, such scientific methods as fundamental provisions of the credit portfolio theory, multifactor regression analysis, extrapolation, trend analysis, mathematical programming, etc. have been used. A methodical approach to the study of contemporary problems and prospects of loan portfolio quality management under martial law, consisting in modelling the profitability of the Ukrainian banking sector, taking into account the quality of the loan portfolio, has been proposed. This approach is implemented by constructing a two-factor power regression equation; forecasting with the establishment of confidence intervals and the development of 3 forecast scenarios (realistic, pessimistic and optimistic); solving the target function to maximize the profit of the banking sector, taking into account the restrictions formed on the basis of forecasting results. A power model of dependence of Ukrainian banking sector profitability on the volume of loan portfolio and non-performing loans has been built and its statistical significance has been established on the basis of official statistics for 2012–2022. It has been determined that an increase in the volume of the bank loan portfolio by 1% leads to an increase in bank income by 3.1%, while an increase in the volume of non-performing loans by 1% leads to a 0.28% reduction in revenues of the banking sector of Ukraine. The loan portfolio and NPL series have been extrapolated to 2023–2025, which is consistent with the medium-term, as long-term projections would be unreliable under martial law and deep recession. According to the results of medium-term forecasting and optimization, it has been proved that the maximum growth of bank revenues by 60.4%, compared to 2022, is possible with an increase in the loan portfolio by 18.9%, a reduction of non-performing loans by 26% and a reduction of their share in the loan portfolio by 13.9%. It has been justified that the key condition for maximising bank revenues is the soonest termination of the russian-Ukrainian war and further expansion of effective government concessional lending programs. In particular, the effectiveness of the state program “Affordable Loans 5–7–9%”, which provided 19% of the bank loan portfolio in Ukraine and became a key mechanism of anti-crisis business support both during the COVID-19 pandemic and during the large-scale invasion from 2022 during the russian-Ukrainian war, has been substantiated.

This article empirically examined the effects of loan portfolio diversification on commercial banks' credit risk in Afghanistan from 2007 to 2019. In this paper, the annualized data is used to run the regression model, and the least-squares method was followed; meanwhile, the Hirschman-Herfindahl index is used as a diversification index. Eventually, the estimation results in compliance with the traditional theory of portfolio management represent that loan portfolio diversification has a negative-significant impact on credit risk, while the capital adequacy ratio coefficient according to the moral hazard hypothesis indicates that the amount of non-performing loans decreases when the proportion of the shareholders' capital in the total capital of the bank's increases. Therefore, commercial banks have to promote their portfolio diversification and increase the proportion of shareholders' capital in the banks' financing resources to efficiently manage their credit portfolio and reduce the credit risks associated with their loan portfolios. [ABSTRACT FROM AUTHOR]

The aim of the article is to identify problematic issues of valuation of property (assets) of banks that are in the process of liquidation, and substantiate proposals for the desired solution, taking into account the need to protect the rights of bank creditors. Although the bankruptcy of banks causes significant economic and moral losses, the processes of removing insolvent banks from the market, their reorganization or liquidation are constantly taking place. Therefore, regulators and banks that have been declared insolvent face many questions, including the adequate valuation of banking assets and the determination of the liquidation estate. The article discusses approaches to asset valuation and features of their application in Ukrainian practice, as well as peculiarities of the sale of assets of banks in liquidation according to the Dutch auction model. It is noted that the imperfection of management of banks’ assets in the process of their functioning leads to discrepancies in the valuation of these low-quality assets in the liquidation procedure. It is determined that the ratio between the estimated value of assets and their book value for banks declared insolvent is on average 26.2 %, and the median value is 22.3 % This leads to a number of problems, including the inability of the Deposit Guarantee Fund (DGF) to ensure the repayment of part of the bank’s liabilities, which could be repaid in case of timely acceptance of tender offers at market value. It is noted that the most liquid assets, which are real estate and property, occupy an insignificant share in the structure of the liquidation mass – about 5 %, and the conversion rate in the sale of real estate quite often reaches 200 %. It is proposed, in accordance with European practice, to empower the Fund to monitor the assets of banks in the process of their functioning. The expediency of valuating assets not from the position of doing business «as usual» but from the point of view of the objective need to sell assets, focusing on the quick sale of assets at a market price, is emphasized. In order to improve the process of valuating the assets of an insolvent bank and focusing on the quick and transparent sale of the bank’s assets, it is proposed to implement the international experience of using loss-sharing agreements into domestic practice. [ABSTRACT FROM AUTHOR]

Banks have significant difficulties in recovering debt, especially when consumers are no longer available following loan disbursement. This study carefully examines the effects of debt management and recovery on bank performance, paying particular attention to the applicability of the credit theory of money. The study's main goals are to thoroughly comprehend the various debt recovery strategies used in Nigeria's banking industry and investigate the connections between outstanding debt, recovered funds, loan client retention, and bank performance. To evaluate the given hypotheses and determine the relationships between these variables, the Chi-Square test was used. The data show that outstanding debt has a considerable influence on bank performance, supporting the credit theory of money. Additionally, a positive correlation between bank performance and loan client retention is discovered and the study finds a link between bank profitability and client relationships. The development of strong, dependable, and good customer connections improves the bank's reputation by increasing client satisfaction, loyalty, and confidence in the bank's dependability as a lender. Credit officers are advised to constantly monitor ongoing debt to avoid payment defaults as part of the study's recommendations. Finally, credit officers should pay frequent visits to borrowers to make sure the money from the loan is being used for what it was intended. [ABSTRACT FROM AUTHOR]

In this paper, we examine the extent to which corruption affects the loan portfolio of microfinance institutions (MFIs). We employ robust econometric estimation on a sample of 507 MFIs across 63 countries from 2005 to 2018. Our results show that corruption is negatively associated with the loan portfolio. However, in semiparametric analysis, we find that lower-level corruption is beneficial to increase the loan portfolio while higher-level corruption is detrimental. The results imply that it is not just corruption that matters as far as its effect on MFIs' loan portfolio is concerned; what matters is the degree of corruption. In further analyses, we find that corruption reduces both the number of active borrowers and average loan per borrower indicating that corruption reduces both coverage and amount of credit extension. The results suggest that the effect of corruption on the loan portfolio is gender-sensitive. Corruption facilitates an increase in loans to female borrowers. Our results are robust to alternative variable measurements and different identification strategies, including two-stage least square. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Business & Management Studies (2709-0876) is the property of Al-Kindi Center for Research & Development and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Repayable financing is one of the oldest practices for financing agriculture. Agricultural credit, in the past, but also in the present, is an important concern of credit institutions such as banks, non-bank lending organizations, savings and loan associations, etc. Agricultural credit remains one of the main instruments for financing the agricultural business, as demonstrated by the practice of the last decades in the Republic of Moldova. The analysis of the bank agricultural credit evolution is imposed as a way to highlight both the trends in its dynamics and to elucidate the existing deficiencies in the agricultural producer – bank relations. The results of these investigations also serve to support the arguments for the bank lending modernization in agricultural business, determined by the general peculiarities of agricultural production and the current economic situation, in order to maintain competitiveness in agricultural markets and promote agricultural development.

Abstract This paper uses cross-country and panel data set to test the significance of microfinance on income inequality reduction at the macro level for a sample of 57 developing countries for the periods 2000–2006 and 2007–2013. This study adopts panel data methodologies, such as ordinary least square (OLS), pooled ordinary least square (POLS) and instrumental variables (IV) estimations to overcome the endogeneity problems among the variables. Empirical results show that countries with higher MFIs’ gross loan portfolio per capita tend to have lower income inequality, which confirm the beneficial outcome of microfinance in reducing inequality at the macro level. Moreover, our results suggest that microfinance loans can lead to improve the relative income position of the poor in developing countries, albeit slowly. Our findings have relevant recommendations to policymakers, as they could generate suitable strategies to consider microfinance institutions as a more popular tool for fighting against both poverty and inequality.

Stagnation of the loan market of Ukraine actualizes issues related to the need to intensify mortgage lending. The key problems that stand in the way of actualization of mortgage lending in Ukraine are identified as follows: preservation of low level of welfare of the population; numerous and high-profile bankruptcies of participants in the primary housing market; poor quality of the previously formed loan portfolio of individuals; actual prohibition for banks to provide loans to individuals in foreign currency; formation in Ukraine of a kind of «resistance movement» against the return of mortgage loans; presence of a moratorium on the recovery of property on foreign currency loans; a complex of problems related to the legal aspects of the provision and repayment of mortgage loans; low level of institutional development of the mortgage market; presence of a number of objective difficulties and subjective factors in the implementation of the government program «Affordable Mortgage 7%». An analysis of the results of the government program «Affordable Mortgage 7%» for 2021 suggests that its key task is fulfilled only by 23%. To intensify mortgage lending in Ukraine, it is necessary: an increase in the availability of lending to individuals for the purchase of housing within the framework of the government program «Affordable Mortgage 7%»; development of additional government mortgage lending programs focused on the purchase of housing in the primary market; ensuring legislative support for judicial reform; further reduction of the share of problem loans in the loan portfolio; providing legislative support for the creation of a second level of the mortgage market, which should include the issuance and circulation of mortgage bonds, which can also be used as a tool for investing pension savings.

This study examines the nexus between credit expansion and the financial sustainability of microfinance institutions (MFIs) in Sub-Saharan Africa (SSA). The study also examines the interaction effects of credit expansion and interest rate/portfolio quality on MFI sustainability. The study relies on panel dataset of 136 MFIs across 31 SSA countries covering the year 2004 to 2018 and applies the Arellano-Bover/Blundell-Bond two-step Generalized Method of Moments (GMM) Windmeijer bias-corrected standard errors to analyze the data. The results establish that credit expansion matters in MFI financial sustainability. Specifically, the study uncovers that while the size of the loan portfolio and loan intensity are positively associated with MFI sustainability, the economic significance of loan intensity is higher. On the other hand, the other credit expansion proxy “credit growth” does not predict the sustainability of MFIs. The results also reveal that the loan intensity and potfolio at risk have interaction effects on MFI sustainability. However, the study fails to support an asymmetric effect of credit expansion on financial sustainability depending on the interest rate charged on loans. The study uses three proxies for credit expansion and gives useful insights for policymakers and/or MFI managers that loan intensity should be the main target of MFIs if the goal is to attain financial self-sufficiency. The study also examines the interaction effects of credit expansion and interest rate/portfolio quality on MFI sustainability and sheds light on what is expected from MFI managers to expand credit access to the poor without compromising sustainability.

Return–risk models are the two pillars of modern portfolio theory, which are widely used to make decisions in choosing the loan portfolio of a bank. Banks and other financial institutions are subjected to limited-liability protection. However, in most of the model formulation, limited liability is not taken into consideration. Accordingly, to address this, we have, in this article, analyzed the effect of including it in the model formulation. We formulate four models, two of which are maximizing the expected return with risk constraint, including and excluding limited liability, and other two of which are minimizing of risk with threshold level of return with and without limited liability. Our theoretical results show that the solutions of the models with limited liability produce better results than the others, in both minimizing risk and maximizing expected return. More specifically, the portfolios that included limited liability are less risky as compared to the portfolios that did not include limited liability. Finally, an illustrative example is presented to support the theoretical results obtained. [ABSTRACT FROM AUTHOR]

Household demand for credits is quite volatile, which requires constant evaluation of it changes. The purpose of the paper is to identify quantitative signals, the use of which increases the predictability of the credit market development. The study utilizes technical analysis methods for an econometric estimation of trends in household demand for credits in Ukraine for the 2002–2019 period. Based on the analysis of historical market lows, it was argued that with all the negative effects of destabilizing factors, the household demand for loans will not fall below the market support point of UAH 50 million. The financial behavior of Ukrainian households when choosing the type of loan is stable and does not change with fluctuations in GDP. Short-term loans are quite dynamic and largely depend on macroeconomic conditions, provoking market movements. If the relevant direction is supported by medium-term loans, the general market trend will correspond to the GDP trend. The demand for long-term loans is quite inertial, its change does not affect the overall market trend. The constant and variable elements of household demand for credit are highlighted.

In conditions of intensified competition, banks, expecting a profit, can place their assets in high-risk instruments, which can lead to loss of liquidity and solvency. The responsibility of the bank's management for the strategic goals of the bank's financial development is growing. Under these circumstances, the role of theoretical and practical aspects of the formation of the bank's financial strategy increases. But it should be remembered that the basis of financial stability and strategic development is the formation of an effective credit policy, which can provide a clear strategy. The strategy is a tool for implementing the strategic management of the bank, which is an activity related to defining the goals and objectives of the organization and ensuring the relationship between the organization and the external environment and, in turn, meets its internal capabilities and allows it to remain receptive to external requirements. The significance of the essence of the loan portfolio was investigated, in particular, the concept of "bank loan portfolio" and its role were clarified. The peculiarities of the concepts of "size" and "structure" of the loan portfolio are determined. The article analyzes the dynamics of the loan portfolio of banks and their number as of January 1, 2018-2021, outlines the factors that have a direct impact. In addition, the loan portfolio of one of the largest systemic banks in Ukraine - JSC CB "PrivatBank" was studied and an assessment of its structure and quality was provided. To improve measures to prevent credit risk, the bank should take into account the cost of credit resources in credit risk management. This will determine the time interval and the appropriateness of adjusting interest on loans, crucial for improving the tools of analysis in the process of credit risk management The conclusions present recommendations for the banking sector of Ukraine in order to further improve lending and improve the loan portfolio of Ukrainian banks.

This paper uses cross-country and panel data set to test the significance of microfinance on income inequality reduction at the macro level for a sample of 57 developing countries for the periods 2000–2006 and 2007–2013. This study adopts panel data methodologies, such as ordinary least square (OLS), pooled ordinary least square (POLS) and instrumental variables (IV) estimations to overcome the endogeneity problems among the variables. Empirical results show that countries with higher MFIs' gross loan portfolio per capita tend to have lower income inequality, which confirm the beneficial outcome of microfinance in reducing inequality at the macro level. Moreover, our results suggest that microfinance loans can lead to improve the relative income position of the poor in developing countries, albeit slowly. Our findings have relevant recommendations to policymakers, as they could generate suitable strategies to consider microfinance institutions as a more popular tool for fighting against both poverty and inequality. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Quantitative Economics Studies (JQES) is the property of University of Kasdi Merbah Ouargla and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The relationship of such key macroeconomic concepts as the monetary system and the national economy in extreme economic situations (in the “military economy”) has been di sclosed. During the process of analyzing the works of Russian scientists of the early twentieth century, the specifics of the monetary instruments of market regulation in the conditions of the “military economy” and the change in the structure of the monetary mass have been considered. It has been shown, that the classical forms of credit (military loans, taxes), due to their low efficiency, give way to credit money, which during the demonetization of gold, play the role of a financial resource (“bills of exchange for the future”).

The article analyzes the current state of the credit portfolio of domestic banks in the context of introduction of new approaches of the National Bank to assess the financial status of the debtor – a legal entity. Ukraine implements the recommendations of the Basel Committee on Banking Supervision on Credit Risk Assessment, which recommends banks to develop their own internal models in order to properly assess their clients. However, the National Bank of Ukraine has chosen another concept for the settlement of this recommendation, in particular, it developed and obliged all domestic banks to use their own methodology for assessing the level of credit risk based on a specific econometric model. Even before the full implementation of the methodology of the National Bank in practice of domestic banks, it was critically evaluated by domestic scientists with the details of deficiencies. The conducted study allowed to analyze the relationship between the introduction of the new NBU methodology for assessing the level of credit risk on corporate loans and changes in the share of non-performing loans in loan portfolios of Ukrainian banks. The obtained results confirmed the low effectiveness of the NBU methodology for identifying insolvent borrowers, as in the background of the growth of lending to legal entities in 2018, the share of non-performing loans was almost unchanged, or insignificantly, indicating that the newly issued loans subsequently went to the category of unemployed. The study summarizes the shortcomings of the current methodology and proposes to differentiate the approaches of banks to assessing the level of credit risk, namely, to allow banks with a long-term functioning in the market to develop and approve in the NBU their own methods for assessing the level of credit risk of the borrower, and for newly created banks – to use the methodology of the NBU until the moment of accumulation of the necessary experience to develop their own methodology.

Monetary policy is affected by a slowdown in economic growth. In the formation of financial stability cannot do without measures to improve the banking sector. Obviously, the accumulation of risks in this area is fraught with the inability of the banking sector to show resilience to external shocks. The banking sector rehabilitation program in Kazakhstan is a wide range of activities, including the assessment of the quality of banks 'assets, so-called stress testing, and support for SLBs from the resources of the National Bank, provided that they are capitalized by second-level banks' shareholders. The main directions of the Program are: increasing the financial stability of the system-forming bank; Increasing financial stability of large STBs and change the regulatory and supervisory environment to improve the financial stability of the banking sector.

Credit operations, among the great variety of services provided by the bank, are one of the most important activities. In the assets of commercial banks, loans occupy a strong position of the most extensional and profitable items. The reliability and financial stability of commercial banks depends on the composition and structure of the bank's loan portfolio and the process of its management. Under current conditions, the development and improvement of the bank's loan portfolio management system intended to minimize the credit risks and ensure the sustainable operation of commercial banks have become particularly important. Crisis phenomena in economy have proved that the activities of any economic entity is associated with uncertainty in market development. Adverse developments in the world markets directly affected the solvency of borrowers of many banks. The increase in defaults of most borrowers resulted in the increase in defaults on loans, causing the increase in overdue debt, lower profitability and liquidity problems in banks. Thus, the recent crisis in the world economy, including Ukrainian economy, has demonstrated the failure of the methods used to assess and manage credit risk in banking, as well as the imperfection of the methods used to manage the loan portfolios of commercial banks. The results of the previous carried out investigation indicate that in order to form the correct management decisions and take practical actions concerning the formation of loan portfolio for commercial bank, it is necessary to assess its status. In this regard, the method of econometric modeling (determination of the relationship between gross domestic product and overdue debt of the banking system in Ukraine, the relationship between the volume of loans issued by banks and the discount rate; the relationship between the volume of loans issued to individuals and the volume of the loan portfolio in general) is differentiated in this paper from other estimation methods. This method made it possible to determine the effectiveness of loan portfolio management of commercial banks. The results of the calculations provide reasons to confirm that there is insignificant relationship between the level of loans to individuals and the loan portfolio. [ABSTRACT FROM AUTHOR]

It is considered and updated the model of risk assessment of bank credit portfolio in the article. The profitability and risk are the main parameters of a bank loan portfolio. The ratio of these indicators characterizes the effectiveness of credit and general activity of the bank. The purpose of credit bank portfolio’s management is to ensure the highest yield at an acceptable risk of level. It is advisable to carry out the credit portfolio risk assessment in three stages. The first stage consist of using 9 indicators that are directly related to the occurrence of credit risk: credit activity ratio, reserve adequacy ratio, loan quality ratio, overdue loan ratio, maximum risk per one borrower (or group of borrowers), the concentration level of large credit risks, the concentration level of credit risk per one insider, loan ratio of written off from the reserve, the rate of return on credit operations. On the second stage of credit risk assessment, it is performed the scored assessment required to determine the integral credit risk indicator. Depending on whether the calculated indicator falls within the optimal value range, its scores are based on one of four formulas. On the third stage, there is determined the integral risk indicator and the degree of credit risk. The calculation of the integral credit risk indicator is advisable to use for assessment of credit risk in dynamics. Comparing the results of evaluating this indicator during several periods, we can conclude that there is a tendency to change the level of credit risk of a bank. It is analysed the credit risk indicators of JSC CB PrivatBank for 2016—2018 years. According to the evaluation results of the integral index, the authors concluded that the level of credit risk management in the bank was improved. But the values did not reach the maximum scores, so JSC CB PrivatBank is exposed to credit risks. It is proposed in the research a number of measures to optimize the credit risk management of bank.

Copyright of Financial & Credit Activity: Problems of Theory & Practice is the property of University of Banking of the National Bank of Ukraine and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)