Methodology of Credit Analysis Development
Methodology of Credit Analysis Development

Summary/Abstract: The subject of research presented in this paper refers to the definition of methodology for thedevelopment of credit analysis in companies and its application in lending operations in the Republicof Serbia. With the developing credit market, there is a growing need for a well-developed risk andloss prevention system. In the introduction the process of bank analysis of the loan applicant ispresented in order to minimize and manage the credit risk. By examining the subject matter, theprocess of processing the credit application is described, the procedure of analyzing the financialstatements in order to get an insight into the borrower's creditworthiness. In the second part of thepaper, the theoretical and methodological framework is presented applied in the concrete company.In the third part, models are presented which banks should use to protect against exposure to risks,i.e. their goal is to reduce losses on loan operations in our country, as well as to adjust to marketconditions in an optimal way.

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