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URN etd-0309104-191844 Statistics This thesis had been viewed 3195 times. Download 1224 times. Author Mien-Chin Lin Author's Email Address No Public. Department Management Business Administration Year 2003 Semester 1 Degree Master Type of Document Master's Thesis Language English Page Count 69 Title The Research on Evaluating the Risk of Consumer Loans－Taking X Bank as an Example Keyword Consumer Loans Consumer Loans Abstract In the wake of Asian financial crisis, economy slowed down, industries transferred their techniques and factories to other countries, and the business of bank credit and loan turned more conservative than before. The focus of loan shifted from business finance to consumer finance, now being the main source of profit in banks. However, with economic downturn, climbing unemployment rate and rising risk of consumer loan, how to evaluate the risk of consumer credit should be the most pressing issue for the banks wanting to develop consumer finance. In other words, banks not only increase the number of consumers applying for loans, but also reduce the risk of breaking contracts to its minimum.
The main purpose of this thesis is to set up a system of examining consumer loan. This research takes samples from cases of consumer loans in X bank from January 2001 to December 2001. In order to form a model, there are 231 cases of normal loans and 231 cases of overdue loans respectively. Logistic-Regression is used as the research method of this research.
Factors such as gender, working organization, seniority, salary, marriage, houses, deposit, credit rating, regions and approved interest rate are used to be predictive variables. The prediction accuracy on overdue loans is 77.9% and on normal loans is 79.2%.
The research results are summaried as follows:
1.Gender is an important factor in assessing the chance of breaking contracts: this research and some similar studies all point out that women are less likely in breaking contracts than men are. Thus, this indicator can be included in scorecards of banks.
2.Rapid advances in technology lead to layoffs in some business sectors. It is not true any more that the longer the seniority is, the lower the chance of breaching contracts. In evaluating risk of credit, banks are suggested to consider what the vocations of loan applicants are.
3.The people with high income do not mean the people with low risk of credit. Banks should take substantial net gain into account, so the variable of earnings against expenditure ought to be added to the original scheme.
4.The age of the loan borrower, the number of guarantors, and the qualification of guarantors do not have significant influence on the risk of the borrower’s credit.
5.The married have lower credit risk than the single do. It shows that family bondage makes the borrower feel obligated and therefore reduces the possibility of breaking contracts.
In conclusion, a good system of examining consumer loans can effectively enhance the operational efficiency and reduce risks of the bank. Computer information systems should be installed to gather, summarize, and analyze information. This research can be provided for further reference for all banks, which want to launch business of consumer loans
Advisor Committee Hsien-che Lee - advisor
Kun-huang Yeh - co-chair
Ruey-ji Guo - co-chair
Files Date of Defense 2004-01-16 Date of Submission 2004-03-09