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Credit risk management for the Jordanian commercial banks: A business intelligence approach

Sep 20, 2012

DOI:

Published in: Australian Journal of Basic and Applied Sciences

Hussain A Bekhet

Commercial banks in Jordan are regarded as vitally important and competitive financial organizations that seek profit by providing various financial services to various customers while managing different types of risk. Credit forms a cornerstone of the banking industry as credit behavior stronglyinfluences the profitability and stability of a bank. Therefore, loan decisions for such instuitions are crucialbecause they can avert credit risk. However, loan application evaluation at Jordanian banks is subjective based oncredit officer's intuition and sometimes a combination of credit officer'sjudgment and traditional credit scoring models. On the other hand, banks store data about their customers in data warehouses which can be viewed as hidden knowledge assets that can be accessed and used through data mining tools. Artificial Neural Networks (ANN) represent a recent development of a new family of statistical techniques

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