Credit Risk in the Leasing Industry
Subject Areas : Financial Knowledge of Securities Analysis
Keywords: Risk, risk management, credit risk and leasing indust,
Abstract :
In the banking system, providing and allocation of resourcesthrough financial facilities such as leases is one of the major goals.Measurement of credit risk is an important factor that affects onmanagement decision making in the banking system.This paper tries to measure credit risk by utilization of Leaseurope(the European Federation of leasing company Associations) model.According to this model we estimate the loss distribution of eachsection. The 99.9th percentile in each of these distributions is anindicator of credit risk in related section. The findings of thisresearch shows that there is a direct relation between age of thelease contracts and credit risk and there is also significantdifference among different economical sections.