Scoring as a method of assessing credit risk: the case of the republic of C?te d’Ivoire

credit scoring is traditionally used in the banking sector to reduce the likelihood of loan defaults. However, this method has not been applied in public financial management. In the presented study, an adaptation of the credit scoring model is proposed for the public sector of C?te d'Ivoire, which allows for the quantitative assessment of the risks of non-fulfillment of payment obligations. The scientific novelty of the work lies in the transformation of approaches to analyzing the payment capacity of public entities, taking into account the specifics of macroeconomic factors. The issue of a lack of formalized risk assessment tools in public financial management is addressed. The proposed method contributes to more effective budget planning and the reduction of fiscal risks, making it promising for further implementation. Credit scoring has long established itself as an effective risk management tool in the banking sphere. It helps financial institutions forecast the likelihood of non-repayment of loans based on data from previous borrowers. However, despite its successful application in the commercial sector, this method is scarcely used in public financial management, including in C?te d'Ivoire. Today, the problem of public debt sustainability and budget planning is especially relevant for developing countries. The increasing dependence on external and internal borrowing necessitates new tools for assessing the payment capacity of public entities. Implementing a credit scoring model in public financial management could offer more accurate forecasts for debt servicing and help reduce fiscal risks.

credit scoring, risk, default, budget deficit, public debt