METHODOLOGICAL APPROACHES TO IMPROVING CREDIT RISK ASSESSMENT AND INTERNAL CONTROL IN SERVICE SECTOR FINANCING
DOI:
https://doi.org/10.5281/zenodo.20503707Keywords:
service sector, lending, credit risk, internal control system, credit monitoring, risk management, COSO, Basel III, non-performing loans, loan portfolio.Abstract
This article examines the role of the internal control system in assessing credit risks arising during the lending
process of commercial banks to service-sector entities and in ensuring their effective management. Given the increasing
contribution of the service sector to the national economy, maintaining the financial stability of enterprises operating in
this sector and reducing the risk of loan default have become critical issues. The study analyzes the key risk factors
encountered in the lending practices of service-sector enterprises, reviews contemporary approaches to credit risk
assessment, and proposes directions for improving the internal control system in accordance with the COSO and Basel
III frameworks. The findings contribute to enhancing the quality of banks’ loan portfolios, reducing the share of nonperforming
loans, and strengthening the overall financial stability of banking institutions.
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