SMEs in countries intervened by the troika - Forecast of bankruptcy risk

For the benefit of its clients, nBanks invests in an important source of knowledge and innovation: academic research. As part of its partnership with the University of Minho, we interviewed Vanise Cruz, author of a master's thesis that defines a predictive model to help companies at risk of bankruptcy, using SMEs from some of the countries intervened by the troika as a sample.

nBanks - Tell us a little about yourself and your background.

Vanise Cruz - My name is Vanise Vera Cruz, I am 23 years old and I am from São Tomé. I am a dynamic person and I believe that for this reason I have always been involved in Student Associations, both during high school and throughout my degree. I like changes and new challenges and that's why I am always willing to start over. I lived in São Tomé until 2013 when I finished secondary education. In the same year, at 17 years old, I came to Portugal to enter higher education and continue my studies. I lived for 5 years in Aveiro, the city where I graduated in Economics at the University of Aveiro. At the end of the course, I chose to change cities and Universities, because I believe that each cycle deserves a new beginning and, for me, nothing better than a new city, a new university and new learning methods. Coming from a small country, with about 200 thousand inhabitants and 1001km2 of total area, I prefer calmer cities. For this reason, I first chose Aveiro and then Braga. I currently live in Braga and am pursuing a master's degree in Finance at the University of Minho.

nBanks - What motivated you to collaborate with nBanks?

V.C. - My goal, after completing all my academic training, is to return to São Tomé and practice my profession there, in order to contribute to the country's development. For this reason, a few years ago I decided that whenever I had the opportunity, I would go to São Tomé and try an internship in my areas of interest (banking and insurance) to better understand the market in these areas. I believe that the last 3 years have been fundamental for me, as it was during this period that I discovered exactly what I want to work with Risk Analysis, specifically Credit Risk Analysis.

When choosing the topics for dissertations and projects, several options were presented, and among them, the nBanks project was a company that had previously captivated me with its concept, during a presentation they made at the University of Minho. Because it met my research interests, which would allow me to get to know the work environment in Portugal and gain more knowledge about banking, I decided to join the nBanks project, without any doubt that this would be the best option for me.

nBanks - What thesis will you develop and what methodology will you use?

V.C. - My thesis will have as its central theme the Bankruptcy Risk Forecast for Small and Medium-sized Enterprises (SMEs), using as a sample companies from some of the countries intervened by the TROIKA.

The methodology used will be an analysis of data from the last 10 years, available on the AMADEUS platform, applying the Z-Score and Propensity Score Matching models.

nBanks - What applicability do you think your thesis will have in the future? What benefits do you identify for companies and their managers?

V.C. - Given that the thesis will be developed in partnership with nBanks, one of my main objectives is that its results bring value and have great applicability for nBanks.

Furthermore, I believe it will be a great benefit for:

- investors, allowing them to better assess the risk they are subject to when investing, avoiding companies at risk of bankruptcy;

- managers, helping them to identify the risk of bankruptcy of their companies, by comparing them with other companies in the same sector.

nBanks - What final comment would you like to leave?

V.C. - nBanks has great potential for success, not only because of the business model it presents, but also because of how it is structured and the team that comprises it.

I once again congratulate nBanks for the initiative and thank them for the opportunity to contribute by being part of this project.

The conclusions of this and the remaining 3 master's theses developed within the scope of the partnership established with the School of Economics and Management of the University of Minho will result in the creation of another functionality for the nBanks platform, to add to the range of tools available to support and streamline corporate financial management.

This new nBanks functionality is expected to begin development next year, when the theses and their respective conclusions will be finalized.

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