scholarly journals Evaluating the Likelihood of Using Linear Discriminant Analysis as A Commercial Bank Card Owners Credit Scoring Model

2010 ◽  
Vol 3 (2) ◽  
Author(s):  
John Mylonakis ◽  
George Diacogiannis
Keyword(s):  
Discriminant Analysis ◽  
Linear Discriminant Analysis ◽  
Commercial Bank ◽  
Credit Scoring ◽  
Linear Discriminant ◽  
Scoring Model ◽  
Bank Card ◽  
Credit Scoring Model

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.

scholarly journals Credit concession through credit scoring: Analysis and application proposal

2017 ◽  
Vol 13 (1) ◽  
pp. 51 ◽  
Author(s):  
Oriol Amat ◽  
Raffaele Manini ◽  
Marcos Antón Renart
Keyword(s):  
Financial Institutions ◽  
Design Methodology ◽  
Credit Scoring ◽  
Real Data ◽  
Statistical Techniques ◽  
Probability Of Default ◽  
Relative Importance ◽  
Linear Discriminant ◽  
Scoring Model ◽  
Credit Scoring Model

Purpose: The study herein develops and tests a credit scoring model which can help financial institutions in assessing credit requests. Design/methodology/approach: The empirical study has the objective of answering two questions: (1) Which ratios better discriminate the companies based on their being solvent or insolvent? and (2) What is the relative importance of these ratios? To do this, several statistical techniques with a multifactorial focus have been used (Multivariate Analysis of Variance, Linear Discriminant Analysis, Logit and Probit Models). Several samples of companies have been used in order to obtain and to test the model. Findings: Through the application of several statistical techniques, the credit scoring model has been proved to be effective in discriminating between good and bad creditors. Research limitations:  This study focuses on manufacturing, commercial and services companies of all sizes in Spain; Therefore, the conclusions may differ for other geographical locations.Practical implications:  Because credit is one of the main drivers of growth, a solid credit scoring model can help financial institutions assessing to whom to grant credit and to whom not to grant credit.Social implications: Because of the growing importance of credit for our society and the fear of granting it due to the latest financial turmoil, a solid credit scoring model can strengthen the trust toward the financial institutions assessment’s. Originality/value: There is already a stream of literature related to credit scoring. However, this paper focuses on Spanish firms and proves the results of our model based on real data. The application of the model to detect the probability of default in loans is original.

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

Strengthen credit scoring system of small and micro businesses with soft information: Analysis and comparison based on neural network models

2021 ◽  
pp. 1-18
Author(s):  
Bing Li ◽  
Binqing Xiao ◽  
Yang Yang
Keyword(s):  
Neural Network ◽  
Commercial Bank ◽  
Scoring System ◽  
Credit Scoring ◽  
Network Models ◽  
Soft Information ◽  
Neural Network Models ◽  
Scoring Model ◽  
Credit Scoring Model ◽  
Bpnn Model

This study identifies credit risk sources, credit scoring index classification modes and modelling methods, and constructs a credit scoring system for small and micro businesses (SMBs) with soft information. Through the analysis and comparison of neural network models, this study demonstrates the superiority of the back-propagation neural network (BPNN) models for loan classification prediction. There are three contributions and innovations as follows. (1) Based on the actual demands and default characteristics of SMBs, this study adds the behavioural variables of loan managers to strengthen the role of soft information in credit scoring model. (2) It develops a hybrid analysis and comparison framework based on the BPNN model. It identifies that the BPNN model is more suitable for approving SMBs loans, as it can precisely identify the second type of error. (3) Using the precious ledger data of SMB loans from a rural commercial bank in Jiangsu province, China, this study compares the prediction accuracy of the credit scoring model based on BPNN using two-level and five-level loan classifications. Further, it illustrates the applicability of the BPNN model. By connecting the practical operations of credit scores and quantitative models, this paper supports commercial bank examination and approval work of SMB loans.

Effect of Topography on Maize Grains Elemental Profile: A Chemometric Approach

2020 ◽  
Vol 16 (8) ◽  
pp. 1079-1087
Author(s):  
Jorgelina Z. Heredia ◽  
Carlos A. Moldes ◽  
Raúl A. Gil ◽  
José M. Camiña
Keyword(s):  
Cluster Analysis ◽  
Discriminant Analysis ◽  
Linear Discriminant Analysis ◽  
Microwave Plasma ◽  
Emission Spectrometry ◽  
Linear Discriminant ◽  
Maize Seeds ◽  
Elemental Profile ◽  
Mineral Profile ◽  
Topographic Characteristics

Background: The elemental composition of maize grains depends on the soil, land and environment characteristics where the crop grows. These effects are important to evaluate the availability of nutrients with complex dynamics, such as the concentration of macro and micronutrients in soils, which can vary according to different topographies. There is available scarce information about the influence of topographic characteristics (upland and lowland) where culture is developed with the mineral composition of crop products, in the present case, maize seeds. On the other hand, the study of the topographic effect on crops using multivariate analysis tools has not been reported. Objective: This paper assesses the effect of topographic conditions on plants, analyzing the mineral profiles in maize seeds obtained in two land conditions: uplands and lowlands. Materials and Methods: The mineral profile was studied by microwave plasma atomic emission spectrometry. Samples were collected from lowlands and uplands of cultivable lands of the north-east of La Pampa province, Argentina. Results: Differentiation of maize seeds collected from both topographical areas was achieved by principal components analysis (PCA), cluster analysis (CA) and linear discriminant analysis (LDA). PCA model based on mineral profile allowed to differentiate seeds from upland and lowlands by the influence of Cr and Mg variables. A significant accumulation of Cr and Mg in seeds from lowlands was observed. Cluster analysis confirmed such grouping but also, linear discriminant analysis achieved a correct classification of both the crops, showing the effect of topography on elemental profile. Conclusions: Multi-elemental analysis combined with chemometric tools proved useful to assess the effect of topographic characteristics on crops.

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