I2CREDIT Nº 5
Predicting Micro-Loan Defaults Using Probabilistic Neural Networks
This is the third of three recent articles on the use of Neural Networks (NNs) in credit management. This article continues the thread of DeLurgio and Hays (2001), and Yegorova, et al (2001).
Abstract
This is the third of three recent articles on the use of Neural Networks (NNs) in credit management. This article continues the thread of DeLurgio and Hays (2001), and Yegorova, et al (2001). It illustrates the application of NNs in predicting the defaults of the SBA funded micro-loan program managed by the Growth Opportunity Connection of KC Mo. As shown here, Probabilistic Neural Networks (PNNs) are effective in predicting loan defaults when the data is insufficient for use of more traditional methods or the analyst is not knowledgeable of or capable of applying other methods. This study applies NNs in an environment of financial data scarcity and high-risk applicants. PNNs were found to be more effective then traditional statistical procedures including logit and discriminant analyses. More importantly, the methodology used to construct and validate models does not require advanced statistical analysis. The importance of cross-validation for users of NNs is clearly illustrated - one of the most important cautions for NN users. Of the initial 24 variables from micro-loan applications, only seven were needed to predict 83% of defaulting (30 out of 36) and 88% of non-defaulting (65 out of 74) loans. In contrast, a logit model accurately predicted only 47% (17 out of 36) of the default loans and 85% (63 out of 74) of the non-default loans; a discriminant model predicted 56% (20 out of 36) of the default loans and 85% (63 out of 74) of the non-defaulting loans.
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Ultimas Notas
I2CREDIT Nº 5
International Snapshot - A look at today’s Credit and Collection Trends and Issues from around the Globe
The world’s population may be ever-expanding, but thanks to
palm-sized cell phones, portable computers, digital cable
television, on-the-spot Internet access, e-commerce, on-line
auctions for airline tickets and an assortment of other the
technological and cultural developments, the business world seems
to be getting increasingly smaller.
Por: Anne Rosso and Pablo Salamone Collector Magazine
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Por: La Nación
EN LA PROVINCIA DE BUENOS AIRES CORTAN EL AGUA A CLIENTES MOROSOS
La empresa estatal Aguas Bonaerenses (ABSA) lanzó un plan para mejorar sus ingresos que incluye el corte de servicio de agua potable a los clientes morosos y contempla una polémica recategorización de usuarios que provocó aumentos en las alÃcuotas que, en algunos casos, significaron subas del 400%.
Por: La Nación
VUELVE AL CONGRESO LA POTESTAD DE LANZAR MORATORIAS IMPOSITIVAS. El senado lo convirtió en Ley.
El tema surgió por primera vez en 1995, en los dÃas del llamado "efecto tequila". En ese momento se decretó una moratoria impositiva amplia y surgió la idea de prohibir nuevas moratorias a fin de insuflar en el contribuyente la idea de que "ésta es la última".
Por: Clarin
FUERTE SUBA EN LA RECAUDACION DEL IMPUESTO A LAS GANANCIAS: cifra récord para el año 2002
Los técnicos de la SecretarÃa de Hacienda no paran de festejar: aunque un grupo importante de tributaristas y empresarios presagió una "rebelión fiscal", la recaudación del impuesto a las ganancias superarÃa este mes los 1000 millones de pesos.
Por: La Nación
Notas Destacadas
- 2012
- CREDIT PERFORMANCE Nº 106
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