The impact of credit scoring on consumer lending

Einav, Liran; Jenkins, Mark; Levin, Jonathan

doi:10.1111/1756-2171.12019

Cited by 149 publications

(73 citation statements)

References 12 publications

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“…In line with this work, Pagano and Jappelli predict that if banks share information about their customers, they would increase lending to safe borrowers, thereby decreasing default rates (Pagano and Jappelli 1993;Jappelli and Pagano 2002). Relatedly, Einav, Jenkins, and Levin (2013) find that credit scoring provides the ability to target more generous loans to lower-risk borrowers among individuals with lower income. Other empirical studies tend to focus on the effects of credit bureaus and creditor rights using data from a cross section of countries (see, e.g., Djankov, McLiesh, and Shleifer 2007;Qian and Strahan 2007).…”

Section: Privacy and Credit Marketsmentioning

confidence: 66%

The Economics of Privacy

Acquisti

Taylor²,

Wagman³

2016

Journal of Economic Literature

894

406

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Section: Privacy and Credit Marketsmentioning

confidence: 66%

The Economics of Privacy

Acquisti

Taylor²,

Wagman³

2016

Journal of Economic Literature

894

406

View full text Add to dashboard Cite

“…On the other hand, in the profit and loss statement interest rate also engage in managing the interest component entirely (Buiter & Panigirtzoglou, 2003). In addition, the interest rate also summarizes the way of whole business debt summary, including the receipt of debt, excellence of the debt, expectations of visions participation proportions and fixed floating mixture of the debt ( Brigo & Mercurio, 2006;Einav, Jenkins, & Levin, 2008).Interest rates are applied in various shapes like there are different interest rates for saving account and for taking loan. Central bank sets the interest rate to control the interest rate that transforms the interest rates to control the lively of financial system.…”

Section: Interest Ratementioning

confidence: 99%

Impact of Interest Rate Changes on the Profitability of four Major Commercial Banks in Pakistan

Khan¹,

Sattar²

2014

ijafr

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The core objective of this project is to analyze the impact of interest rates changes on the profitability of commercial banks being operated in Pakistan by examining the financial statements of four major banks during 2008 to 2012. Like the efficiency of banking sector is considered most important for economic growth, monetary policy implementation and macro-economic stability. From the past few years, interest spread of banking sector of Pakistan is rising. As a result variations in the interest rate depress the savings and investment and on the other hand it increases the efficiency of banks" lending. In this paper interest rate is an independent variable and bank profitability is a dependent variable. To examine the impact of interest rate changes on the profitability of commercial banks in Pakistan, Pearson correlation method is used in this study. As a result it is found that there is strong and positive correlation between interest rate and commercial banks" profitability. It means if the value of interest rate is increases/decreases then as result value of banks" profitability will also increases/decreases.

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“…As this study is motivated from an industrial consultancy project, our partner which provides financial technology to its customers required a new business model for acceleration in decision-making in the credit lending processes of lenders. Based on the fact that consumer lending has experienced a transition from traditional interview based processes to data-driven models for credit risk assessment, the size and the magnitude of channels influenced by the implementation of credit scoring should be considered (Einav, Jenkins & Levin, 2013).…”

Section: Methodsmentioning

confidence: 99%

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

Alma¹

2017

The European Proceedings of Social and Behavioural Sciences

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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.

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The impact of credit scoring on consumer lending

Cited by 149 publications

References 12 publications

The Economics of Privacy

The Economics of Privacy

Impact of Interest Rate Changes on the Profitability of four Major Commercial Banks in Pakistan

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

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