Strategic Decision Making Of Micro-Lenders: An Innovative Business Model For Risk Management

Abstract

Strategic decision-making processes necessitate a significant amount of experience and the consideration of a wide range of factors associated with the decision problem. Determination of applicant credit score and loan decisions are such decisions that subjective judgement of loan officers can produce poor results with substantial losses. This study is triggered as a result of an industrial consultancy project with a partner providing technological solutions for financial services. Anticipated requirement for an epayment system that connects financial lenders, credit applicants and retailers digitally through a system is the main motivation of the study. Another focus of the study is on providing immediate loan access to retail customers which has necessitated automated processes and a decision-support system to assist the analysis of loan applications. The proposed system automatically evaluates a credit application as soon as the relevant information is inputted to the system at the end of the shopping process. The decision-making process should be supported with appropriate systems performing computerized credit assessment processes for quick and accurate decisions. The main complementary tools for the proposed system include a fraud detection module and credit risk assessment module which runs credit scoring algorithms. The proposed system will make loan or credit line decisions faster by eliminating paper work, easier by eliminating bureaucracy, and more accurate by newly integrated algorithms and approaches.

Determining Probabilities for a Commercial Risk Model of Czech Exports to China with Respect to Cultural Differences and in Financial Management

“…A considerable number of risk management models generate a range of studies and manuals dealing with the issue; the following selection lists just a few examples -Alma (2017); Brillinger (2018); Dostál et al (2005); Fotr & Hnilica (2014); Korecký & Trkovský (2011); Valaskova et al (2018). A frequently discussed problem is the client's creditworthiness rating and the creation of the credit risk model (Alma, 2017). Financial risk assessment models use data on prosperity and profitability factors determined (Valaskova et al, 2018;Kliestik et al, 2018).…”