�Business World� Library

Antonio Dichev
DISCRIMINATIVE ABILITY IN ESTIMATING PROBABILITY OF DEFAULT WITH CERTAIN MACHINE LEARNING ALGORITHMS
JEL: �23, C58, G32

Keywords: probability of default, machine learning, risk assessment, credit risk

Summary: The article highlights the importance and added value of some machine learning algorithms in assessing default probability. The results of the research highlight the discriminative ability added to many other essential aspects of machine learning in assessing credit risk. These aspects can be identified as specific opportunities and challenges. As for the discriminative ability regarding the analysed sample, the results prove the superiority of machine learning over the traditionally established and known models. For individual business organizations with exposures to credit risk, machine learning could contribute to reducing the credit losses with larger volumes of business transactions.
Atanas Damyanov
AN OUTLINE OF THE FAULT LINE IN THE EUROPEAN UNION
JEL: F02, F42, F63

Keywords: fault, morphogenetic structure, mentality, fish dinner

Summary: In this research we have made all effort to avoid the natural, geological and physical aspect of the term fault. We have agreed that a fault refers to the absence of unity and agreement in a particular system. Thus, we have fundamentalized our views. The first emphasis is placed on the withdrawal of the United Kingdom (UK) from the EU. We trace chronologically the period from the adoption of the UK in the EU to the month of December 2020. We have established one of the reasons for Brexit, which refers to the mental differences between the UK and the Continent. Further on, we stress the fact that the faults in the EU, being diverse in nature, are also caused by a first-degree indirect relation to the wakening empires of the world, the Mitteleuropa philosophy, the separation of Old and New Europe, etc. We propose a two-factor matrix, which we use to find the relationship between the stages of the EU expansion and the degree of unity and agreement in it. In the conclusion, we argue that we shall set free from the integration romanticism and work towards a post-Lisbon treaty.
Ivailo Nikolaev Marinov
TRANS-BORDER EXPANSION IN THE QUICK LOANS SECTOR (PROBLEMS AND SOLUTIONS)
JEL: F36, G29

Keywords: quick loans, scoring models, risk of default.

Summary: The enterprises operating in the �quick loans� sector are microfinance institutions. Since they are not banking institutions, they need to adhere to more rigid financial management rules both in terms of fund raising and lending, especially regarding the so called �quick loans� category. The "quick loans" sector is defined as economic activity that, under the terms of the regulatory framework in force, allows a non-banking financial institution to provide unsecured (short-term) loans based on borrower�s income and credit profile and to charge high interest rates and added fees to offset the associated risk. The results of the survey confirm that this sector is a specific segment of the financial services sector that complies with the national regulations and creates a market for financial services that are essentially equivalent to the unsecured short-term bank loans but have profitability and return characteristics that make them competitive to the services offered by commercial banks. The successful of the financial management of these companies is based on their scoring models for assessing the risk of borrower�s default.

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