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Credit Risk Assessment using Machine Learning Algorithms

Attigeri, Girija V and Pai, Manohara M.M. and Pai, Radhika M (2016) Credit Risk Assessment using Machine Learning Algorithms. In: International Conference on Internet Economics and Psycho-Informatics, 20/08/2016, Bandung.

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Abstract

Financial institutions suffer from risk of losing money from bad customers. Specifically banking sectors where the risk of losing money is higher, due to bad loans. This causes economic slowdown of the nation. Hence credit risk assessment is an important research area. In this paper research methodology based framework using diagnostic, cross sectional study is used for risk analysis. Empirical approach is used to build models for credit risk assessment with supervised machine learning algorithms. Two classification and prediction models are built one using Logistic regression and other using Neural Network. Models are evaluated using chi square statistical test. This study infers the significance of using machine learning algorithms in predicting bad customers. For the data set and parameters considered logistic regression has shown better performance.

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: Credit risk, Machine learning, Logistic Regression, Neural Network, Chi square test
Subjects: Engineering > MIT Manipal > Information and Communication Technology
Depositing User: MIT Library
Date Deposited: 15 Oct 2016 12:05
Last Modified: 15 Oct 2016 12:05
URI: http://eprints.manipal.edu/id/eprint/147153

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