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Finance and Credit
 

Assessing the feasibility of bank's affiliation with a financial industrial group

Vol. 21, Iss. 1, JANUARY 2015

PDF  Article PDF Version

Available online: 8 January 2015

Subject Heading: Banking

JEL Classification: 

Pages: 2-8

Matveeva L.G. Southern Federal University, Rostov-on-Don, Russian Federation
matveeva_lg@mail.ru

Chernova O.A. Southern Federal University, Rostov-on-Don, Russian Federation
chernova.olga71@yandex.ru

Importance In conditions of implementing the model of non-resource development of the national economy, there is a need to boost innovation processes of the Russian industry. The lack of own resources to deliver innovation projects necessitates developing new forms of interaction of industrial enterprises and banks, which ensure the most efficient use of the combined potential of stakeholders. This explains the importance and relevance of the conducted research.
     Objectives The objective of the study is to develop model tools to assess the feasibility of bank's affiliation with a financial-industrial group in the form of a consortium.
     Methods The article considers the situation when a bank provides loans to an industrial enterprise, and simultaneously has a share in its authorized capital. The proposed economic and mathematical tools allow determining quantitative characteristics of the system parameters (the bank's participation interest in the authorized capital of the enterprise, the volume of bank loans granted to the enterprise to implement an innovation project, the share of principal and interest amount of the loan subject to repayment within a considered time interval), which correspond to the interests of both the enterprise getting the loan and the bank. The model enables to choose the optimal values of these parameters depending on initial conditions and to analyze the stability of the obtained solution. The model can be useful for analyzing opportunities of creating financial industrial groups and determining a feasible amount of investment.
     Results The model can help identify possibilities of developing a non-resource sector of regional economy on the basis of building up new integrated structures.
     Conclusions and Relevance We conclude that the presented model can be used for strategic decision-making related to development of the non-resource sector of the national industry.

Keywords: financing, investment, project, development, industry, financial-industrial group, consortium

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