In time of financial turmoil, the banks are ready to meet halfway only potential borrowers of top quality.
Photo: Vasily Shaposhnikov
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The Credit Professional Impropriety
Russia’s banks are changing methods to assess potential borrowers, taking into account the field of their professional occupation. Raising money isn’t easy for a person employed in construction, metallurgical and financial sectors. Those people have been added to the risky group on redundancy plans of their employers.
The sources with a few banks spoke of the change in criteria methods. Nowadays, they pay greater attention to the standing of company, where a borrower works, whether he/she has a profile high education. They also examine business owners in greater detail.
In Vozrozhdenie bank, they have changed the system of borrower’s automatic evaluation (the scoring cards), introducing new procedures to calculate scores for different categories of borrowers. VTB 24, Russian Standard, Home Credit & Finance Bank have toughened requirements to borrowers, attributing that move to the need to adjust credit strategy to volatile market conditions.
First of all, the new methods of assessing reliability of potential borrower take into account his/her occupation. In their risk management, they pay particular attention to the branches that suffer from redundancy. According to Russia’s employment agency, Rostrud, 1,073 Russia’s enterprises planned to reduce the strength of personnel by 46,000 in October. In this respect, the most vulnerable appear construction, metal industry and financial sector.
Imposing credit limits on people of certain occupation will lower consumer demand, the analysts say. If the situation survives longer than four to six months, the social strain will increase in the regions, where the urban elements are metal and construction enterprises and where the unemployment will surge, forecasted Stanislav Kleshchev from VTB 24.
www.kommersant.com
All the Article in Russian as of Nov. 17, 2008
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