Problems of determining the borrower's creditworthiness

Keywords: borrower's creditworthiness, creditworthiness assessment, assessment methods, creditworthiness in times of war, credit scoring


This article addresses the challenges associated with determining the borrower's creditworthiness. The authors define the borrower's creditworthiness as the ability to timely and fully meet debt obligations to the lender. This determination is based on an evaluation of the borrower's financial condition, forecast of business development, and other factors influencing the ability to repay the loan.

The authors identify internal and external factors affecting the creditworthiness of borrowers in Ukraine. Internal factors include the economic situation, regulatory policies, credit history, credit rating, and a lack of financial literacy. External factors encompass the global economic situation and the political climate.

The article also discusses challenges in determining the borrower's creditworthiness during times of war. The authors note that creditworthiness can sharply decrease during such periods due to factors such as reduced income, increased costs, decreased demand for goods and services, and an unstable economic situation.

To address these challenges during wartime, the authors propose the following recommendations:

  1. Widespread use of artificial intelligence: AI enables the consideration of more factors affecting the borrower's creditworthiness and the adaptation of credit scoring models to changes in the economic situation.
  2. Expansion of data on the borrower's financial condition: Financial institutions should utilize more data sources, including unstructured data such as social media and behavioral data, to assess the borrower's financial condition.
  3. Development of new methods for assessing creditworthiness: Financial institutions should create new methods that account for the specific conditions of wartime.
  4. Establishment of cooperation between financial institutions and government agencies: This collaboration will provide additional data on the financial condition of borrowers, offering financial institutions a more comprehensive view.
  5. Promotion of financial literacy among the population: Improving financial literacy will empower borrowers to better understand their financial obligations and make more informed lending decisions.

Implementing these recommendations will enable financial institutions to enhance the accuracy of creditworthiness assessments and, consequently, reduce credit risks during times of war.


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Author Biographies

Oleksii Miroshnyk, V.N. Karazin Kharkiv National University

PhD in Economics, Associate Professor

Svitlana Shubina, V.N. Karazin Kharkiv National University

PhD in Economics, Associate Professor

Valeriia Shulha, JSC CB "PrivatBank"

Corporate Client Service Manager 


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How to Cite
Miroshnyk, O., Shubina, S., & Shulha, V. (2023). Problems of determining the borrower’s creditworthiness. Financial and Credit Systems: Prospects for Development, 4(11), 33-40.
Finance, accounting, audit and taxation