Leasing company — model for calculating write-offs on bad debts.
What challenge/ problem did the client come with?
Our client — a leasing company came to us with a request to create a model for calculating bad debt allowances, consistent with the expected loss model required by the International Financial Reporting Standard No 9.
What actions have we proposed and carried out?
We prepared a model that imported data on active customer contracts, calculated PD, LGD and EAD coefficients, and then applied them according to the classification of contracts to the relevant baskets.