Assessing the creditworthiness of Russia’s grain producersound, first results and tariff consequences

Abstract

This study develops an algorithm that allows one to assess the creditworthiness of a borrower — an agricultural enterprise. It incorporates a scoring model and coefficients’ standard values included in the model. The industry model is based on panel data from 99 companies, 39 of which went bankrupt between 2011 and 2020. The regulatory framework is compiled on the basis of the analysis of the most resilient enterprises in the industry, as well as bankrupts. To analyze the creditworthiness of enterprises, the authors analyzed 11 indicators used by JSC Rosselkhozbank. Using correlation analysis and other econometric tests, 5 optimal coefficients were selected out of 11 and a scoring model was built. The overall accuracy of the credit rating was high and amounted to 86.1%. The scoring model verified correctly 85% of non-bankrupt companies and 87.2% of bankrupts.