Use of Binary Dependent Variables for Modelling Borrowers’ Creditworthiness

  •  E. I. Kadochnikova    
  •  E. A. Polovkina    
  •  E. A. Grigoreva    
  •  L. D. Badrieva    


This article provides an econometric analysis of borrowers’ creditworthiness in order to create corporateorganizational and economic knowledge. It stresses the need for modern methods of applied analysis of creditportfolio management. The authors seek to prove the feasibility of using binary variables to identify and measurecreditworthiness drivers in cognitive supporting of a credit institution management. The paper proposes amethodological approach to modeling the creditworthiness of potential borrowers based on models with binarydependent variables. The results of empirical evaluations which were received through the application of Gretlsoftware confirmed their feasibility in management of the loan portfolio by credit institutions.

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