Сredit Risks and Features of Their Safety

• Main Authors: Olena Bazilinska, Olena Panchenko
• Format: Article
• Language: English
• Published: National University of Kyiv-Mohyla Academy 2019-11-01
• Series: Наукові записки НаУКМА: Економічні науки
• Subjects: loans; credit risk; risk management; credit insurance; loan insurance; economics; finance; bank
• Online Access: http://spne.ukma.edu.ua/article/view/185131/184729

The article reveals the essence of credit risks, substantiates the necessity of their security in modern conditions, and also proves that the credit risk insurance should focus on protecting borrowers from risks that threaten their solvency. In the course of the study, different approaches to the division of the credit risk insurance are analyzed, and it is established that credit risks are a kind of financial risks which are a component of business risks, and the concept of “credit insurance” is identical to the concept of “insurance of credit risks” and includes the concept of “loans insurance”. The article substantiates the classification of the credit insurance based on the allocation of various types of credit relations which are formed both with banks-creditors and between economic entities in the process of product sales, as well as makes the division of insurance services which are included in the credit insurance by types of loans. The research also offers the division of the credit insurance for various branches of insurance, the form of insurance, the duration of insurance contracts, and the method of organization of insurance protection. According to the research, it is concluded that a detailed study of the content and structure of the credit insurance has not only theoretical but also practical value, as it allows comparing different types of insurance coverage of credit risks and choosing the most optimal insurance.