Development of functional models for assessing the credit risk of financial organizations in the context of geopolitical instability

Loan financing is one of the most widely used sources of raising funds by organizations, particularly in Russia. In the current environment, financial organizations attach foremost importance to the reliability of the borrower and methods of hedging the risks associated with lending. Thus, an accurate and reliable evaluation of the creditworthiness of a counterparty based on available data becomes critical. Considering today’s decreasing availability of financial information, growing economic uncertainty, reduction in the number of financial institutions in Russia caused by termination of licenses, financial market consolidation, and a gradual withdrawal of foreign players, we may conclude that the importance of qualitative credit risk assessment is more important than ever before. Financial organizations need to use qualitative indicators and methods to adjust scoring models for risk assessment and to keep the unprofitability of their portfolio and their financial stability at an acceptable level. This article presents one of the effective methods of calculating reliability indicators of potential borrowers, which is based on creating correlation graphs of their key performance indicators.