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How Secure Are Good Loans: Validating Loan-Granting Decisions And Predicting Default Rates On Consumer Loans
2011
Review of Business Information Systems (RBIS)
The failure or success of the banking industry depends largely on the industrys ability to properly evaluate credit risk. In the consumer-lending context, the banks goal is to maximize income by issuing as many good loans to consumers as possible while avoiding losses associated with bad loans. Mistakes could severely affect profits because the losses associated with one bad loan may undermine the income earned on many good loans. Therefore banks carefully evaluate the financial status of each
doi:10.19030/rbis.v6i3.4563
fatcat:zedakioi5bcqldngdywto7pmuq