Using data mining approaches to build credit scoring model: Case study — Implementation of credit scoring model in microfinance institution

2018 ◽  
Author(s):  
Jasmina Nalic ◽  
Amar Svraka
Keyword(s):  
Data Mining ◽  
Credit Scoring ◽  
Model Case ◽  
Scoring Model ◽  
Study Implementation ◽  
Microfinance Institution ◽  
Using Data ◽  
Credit Scoring Model

scholarly journals Design and Development of Credit Scoring Model for Conventional Banks for Individual Borrowing Case Study on PT BPR Sungai Puar District Agam

2018 ◽  
Vol 1 (1) ◽  
pp. 43-56
Author(s):  
Rio Hendriadi ◽  
Anne Putri ◽  
Dona Amelia ◽  
Rany Syafrina
Keyword(s):  
Logistic Regression ◽  
Discriminant Analysis ◽  
Credit Risk ◽  
Credit Scoring ◽  
Scoring Model ◽  
Secondary Sources ◽  
Conventional Banks ◽  
Credit Scoring Model ◽  
Conventional Bank

Objective – This research is conducted to design and to develop credit scoring model on conventional bank in order to determine individual loan, the research takes place in PT BPR Sungai Puar, Kabupaten Agam. This model tries to evaluate the credit risk of BPR Sungai Puar.Design/methodology – The data are considered as secondary sources as they are taken from BPR Sungai Puar database by classifying them into two analysis tools including discriminant analysis and logistic regression. Results – The resuts are presentes inform of model and credit scoring perfection on PT BPR Sungai Puar Kabupaten Agam.Keywords Credit Scoring Model, Conventional Banks, Individual Loan

Building a Credit Scoring Model Based on Data Mining Approaches

2020 ◽  
Vol 30 (02) ◽  
pp. 147-169
Author(s):  
Jasmina Nalić ◽  
Goran Martinovic
Keyword(s):  
Data Mining ◽  
High Performance ◽  
Banking Sector ◽  
Credit Scoring ◽  
Model Performance ◽  
Real Data ◽  
Support Vector ◽  
Scoring Model ◽  
Adopted Model ◽  
Credit Scoring Model

Nowadays, one of the biggest challenges in banking sector, certainly, is assessment of the client’s creditworthiness. In order to improve the decision-making process and risk management, banks resort to using data mining techniques for hidden patterns recognition within a wide data. The main objective of this study is to build a high-performance customized credit scoring model. The model named Reliable client is based on Bank’s real dataset and originally built by applying four different classification algorithms: decision tree (DT), naive Bayes (NB), generalized linear model (GLM) and support vector machine (SVM). Since it showed the greatest results, but also seemed as the most appropriate algorithm, the adopted model is based on GLM algorithm. The results of this model are presented based on many performance measures that showed great predictive confidence and accuracy, but we also demonstrated significant impact of data pre-processing on model performance. Statistical analysis of the model identified the most significant parameters on the model outcome. In the end, created credit scoring model was evaluated using another set of real data of the same Bank.

scholarly journals Modeling with ontologies design patterns: credit scorecard as a case study

2020 ◽  
Vol 17 (1) ◽  
pp. 429
Author(s):  
Jalil Elhassouni ◽  
Abderrahim El Qadi ◽  
Mehdi Bazzi ◽  
Mohamed El Haziti
Keyword(s):  
Credit Risk ◽  
Design Patterns ◽  
Domain Knowledge ◽  
Credit Scoring ◽  
Decision Making Process ◽  
Credit Risk Management ◽  
Scoring Model ◽  
Ontology Design ◽  
Credit Scoring Model

<span lang="EN-US">This paper proposes an ontological scorecard model for credit risk management. The purpose of credit scoring model is to reduce the possibility of potential losses with regard to issued loans. Loans are provided according to strict criteria which contain information about the client, loan structure, the purpose, repayment source and collateral. Several techniques have been used for credit risk assessment before granting a loan. Ontology design patterns is used here to enable the implementation of domain knowledge using the OWL rules and to improve the decision making process in credit monitoring. The modeling of our ontology will make the data publication simpler and graph structures intuitive, thus making its reusability and expandability easier.</span>

A Data Mining Approach to Forming Generic Bills of Materials in Support of Variant Design Activities

2004 ◽  
Vol 4 (4) ◽  
pp. 316-328 ◽  
Author(s):  
Carol J. Romanowski , ◽  
Rakesh Nagi
Keyword(s):  
Data Mining ◽  
Product Family ◽  
Research Direction ◽  
Design Constraints ◽  
Variant Design ◽  
Data Mining Approach ◽  
Design Activities ◽  
Using Data ◽  
New Research

In variant design, the proliferation of bills of materials makes it difficult for designers to find previous designs that would aid in completing a new design task. This research presents a novel, data mining approach to forming generic bills of materials (GBOMs), entities that represent the different variants in a product family and facilitate the search for similar designs and configuration of new variants. The technical difficulties include: (i) developing families or categories for products, assemblies, and component parts; (ii) generalizing purchased parts and quantifying their similarity; (iii) performing tree union; and (iv) establishing design constraints. These challenges are met through data mining methods such as text and tree mining, a new tree union procedure, and embodying the GBOM and design constraints in constrained XML. The paper concludes with a case study, using data from a manufacturer of nurse call devices, and identifies a new research direction for data mining motivated by the domains of engineering design and information.

scholarly journals Measuring and Managing Credit Risk for Chinese Microfinance Institutions

2018 ◽  
Vol 10 (7) ◽  
pp. 56
Author(s):  
Jie Li ◽  
Zhenyu Sheng
Keyword(s):  
Credit Risk ◽  
Predictive Power ◽  
Direct Method ◽  
Credit Scoring ◽  
Microfinance Institutions ◽  
Linear Discriminant ◽  
Management Level ◽  
Scoring Model ◽  
Subjective Appraisals ◽  
Credit Scoring Model

Chinese microfinance institutions need to measure and manage credit risk in a quantitative way in order to improve competitiveness. To establish a credit scoring model (CSM) with sound predictive power, they should examine various models carefully, identify variables, assign values to variables and reduce variable dimensions in an appropriate way. Microfinance institutions could employ both CSM and loan officer’s subjective appraisals to improve risk management level gradually. The paper sets up a CSM based on the data of a microfinance company running from October 2009 to June 2014 in Jiangsu province. As for establishing the model, the paper uses Linear Discriminant Analysis (LDA) method, selects 16 initial variables, employs direct method to assign variables and adopts all the variables into the model. Ten samples are constructed by randomly selecting records. Based on the samples, the coefficients are determined and the final none-standardized discriminant function is established. It is found that Bank credit, Education, Old client and Rate variables have the greatest impact on the discriminant effect. Compared with the same international models, this model’s classification effect is fine. The paper displays the key technical points to build a credit scoring model based on a practical application, which provides help and references for Chinese microfinance institutions to measure and manage credit risk quantitatively.

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