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Development of the Credit Risk Assessment Mechanism of Investment Projects in Telecommunications

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Internet of Things, Smart Spaces, and Next Generation Networks and Systems (ruSMART 2017, NsCC 2017, NEW2AN 2017)

Part of the book series: Lecture Notes in Computer Science ((LNCCN,volume 10531))

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Abstract

We developed a mechanism of modelling of internal credit ratings (ICRs). It is applied in investment controlling to assess the credit quality of projects of telecommunication companies. Its advantages over the conventional credit risk modelling approaches are higher robustness and incorporation of all modelling operations in one mechanism. The mechanism gives the possibility to compare of modelled ICRs to the public credit ratings assigned by reputable international credit agencies. To achieve higher accuracy, the mechanism converts the input financial data, presented in different accounting standards, to the common basis. The explanatory variables in the mechanism are closely aligned with the credit risk assessment factors listed in the methodologies of international credit rating agencies. The testing of the mechanism shows that ICRs modelled with application of our mechanism had the accuracy ratio of 55% for testing sample and 65% for the design sample. This exceeds the accuracy ratios of ICRs modelled with application of conventional approaches (37%–42%).

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Authors and Affiliations

  1. St. Petersburg State Polytechnical University, St. Petersburg, Russia

    Sergei Grishunin & Svetlana Suloeva

Authors
  1. Sergei Grishunin
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  2. Svetlana Suloeva
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Corresponding authors

Correspondence to Sergei Grishunin or Svetlana Suloeva .

Editor information

Editors and Affiliations

  1. Electronics and Communication Engineering, Tampere University of Technology, Tampere, Finland

    Olga Galinina

  2. Electronics and Communication Engineering, Tampere University of Technology, Tampere, Finland

    Sergey Andreev

  3. FRUCT Oy, Helsinki, Finland

    Sergey Balandin

  4. Tampere University of Technology, Tampere, Finland

    Yevgeni Koucheryavy

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Grishunin, S., Suloeva, S. (2017). Development of the Credit Risk Assessment Mechanism of Investment Projects in Telecommunications. In: Galinina, O., Andreev, S., Balandin, S., Koucheryavy, Y. (eds) Internet of Things, Smart Spaces, and Next Generation Networks and Systems. ruSMART NsCC NEW2AN 2017 2017 2017. Lecture Notes in Computer Science(), vol 10531. Springer, Cham. https://doi.org/10.1007/978-3-319-67380-6_28

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  • DOI: https://doi.org/10.1007/978-3-319-67380-6_28

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-67379-0

  • Online ISBN: 978-3-319-67380-6

  • eBook Packages: Computer ScienceComputer Science (R0)

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