Open AccessModeling the Escrow Financing Influence on the Efficiency of Development Project
Author(s) -
A. Chayetskiy,
A. Evdokimenko,
Anton Kogan
Publication year - 2020
Publication title -
iop conference series. materials science and engineering
Language(s) - English
Resource type - Journals
eISSN - 1757-899X
pISSN - 1757-8981
DOI - 10.1088/1757-899x/953/1/012045
Subject(s) - escrow , finance , investment (military) , apartment , loan , business , payment , actuarial science , engineering , civil engineering , politics , political science , law
The influence of financing forms on the development projects effectiveness for the creation of apartment buildings are examined in the article. The financial model of the project of creating an apartment building (PC AB) in terms of escrow financing is described. This method of financing appeared in Russia recently as a result of amendments to the Federal Law dated 30.12.2004 No. 214-FL. The study aim is to analyze the impact on PC AB financial characteristics of banks requirements for the minimum investments volume of developers’ own funds in such projects. The calculations are based on the financial model of PC AB developed by the authors (it is described in the text, made according to the data of a specific PC AB in Novosibirsk). As the study result, a description of PC AB main financial results and indicators of its effectiveness was obtained for the traditional condition of escrow financing (investment by the developer of its own funds in the amount of more than 10% of PC AB cost) and for an alternative condition (investment less than 10%). It follows from the study that the bank’s softening of the requirement on the amount of developers’ investments leads to an increase in the efficiency of their investments, i.e. more active developers. Therefore, there is a potential for growth in banks’ incomes both by increasing the average loan amount and by increasing the number of loans.