MODELING OF FINANCIAL SOLVENCY EVALUATION OF MICROFINANCE ORGANIZATION CLIENTS

Assessment of client’s creditworthiness is an important issue for microcredit organizations. In spite of the fact that a lot of measures are applied to avoid incurring of debt, it is impossible to avoid it completely. One of the ways to prevent overdue indebtedness is to assign a scoring point to clients at the initial assessment of their solvency. Experience has shown that models built on the basis of statistics collected by the official bodies turn out to be ineffective for microcredit organizations operating in a particular region of the Russian Federation. In this regard, it was decided to form a scoring system based on the statistics of a particular microcredit organization. The purpose of this study is to develop a system for assessing the solvency of clients for a microcredit organization on the basis of econometric modeling. The paper uses the data of a large microcredit organization of the Far East region. To create econometric models, the client's solvency scale was previously developed; an extensive database of clients was collected and processed. Collinear and non-essential factors were excluded from the study based on the correlation-regression analysis. Statistica software package was used to develop the econometric models.

As a result of the creation, analysis, and evaluation of the quality of different econometric models, the best model for calculating the client's solvency assessment score was determined on the basis of the relevant tests.

The developed model is a tool for the initial evaluation of new clients. It can be used not as the main factor in assessing the creditworthiness of individuals, but as one of the factors that influence the final decision for signing a contract.