Data mining models often carry the final objective of maximizing profit or minimizing cost. This problem becomes even more profound in financial applications that can have multiple constraints, such as interest rate, score cut-off, and the loan amount to allocate. In this paper, we present a pricing framework for discovering the total profit from a probabilistic model, given a benefit function.

Risk-Adjusted-Return-On-Capital (RAROC) is a loan-pricing criterion under which bank sets the loan term such that certain rate of return achieved on regulatory capital required by Basel regulation. Some banks calculate amount for each standardized approach (“standardized banks,” proportional to amount), and others internal rating-based (IRB) (“IRB related Value-at-Risk loan). This article exami...

We study a controlled corporate experiment in which loan officers were compensated to engage in loan prospecting in addition to the traditional loan screening. Loan prospecting led to larger loan sizes (+15%) and higher origination rates (+31%) while keeping the traditional credit quality threshold and interest rate intact. Loan officers attempt to influence the decision making process: loan of...

This paper deals with loan contracting from a private bank in Vietnam. We focus on the main loan contract features that the bank uses in lending to business firms, namely loan maturity, collateral and loan interest rate. Based upon the simultaneous equation model of Dennis et al. (2000) and the bank’s loan contracting policies, we examine the possible interdependency of the three different loan...

Banks may well perform differently in lending to firms according to their funding structure. This paper surveys the relation between Loan volatility and deposit in Iranian banking system. The extent to which bank lending is connected to funding structure is affected by the banks’ characteristics (such as capital structure, profitability, and the measure of non-performing loans). To analyze this...

the study investigated the loan repayment, its determinants and socio-economic characteristics of microfinance loan beneficiaries in the southeast states of nigeria. it was carried out in three states of the five southeast states. using a multistage sampling technique, a total of 144 loan beneficiaries in the three segments of mfis, namely; formal (commercial and development banks); semi-formal...

class Loan { ... protected Loan(...) { ... } } public class TermLoan extends Loan { public TermLoan(...) { super(...); } } public class Revolver extends Loan { public Revolver(...) { super(...); } } public class RCTL extends Loan { public RCTL(...) super(...); } } Refactoring To Patterns, Copyright © 2001, Joshua Kerievsky, Industrial Logic, Inc. All Rights Reserved. Page 17 of 87 The abstract ...

the purpose of this study is to assess the transaction cost of borrowing from non-governmental investment development funds which are established in less than a decade. transaction costs are considered as significant and limiting factors for micro-borrowers in using formal loans. the required data are provided by the investment developing support’s parent company using the stratified random sam...