Applying Discriminant Model to Manage Credit Risk for Consumer Loans in Vietnamese Commercial Bank
Abstract
This study estimates a two-group discriminant function to determine the expected financial health of the consumer credit customers’ of a bank of Vietnam by using five demographic, socio-economic, and loan characteristics of the sample borrowers. The estimated function is significant at one per cent level of significance and the model estimates financial health/group membership with average seventy-three per cent accuracy. Like developed countries, it is expected that use of the estimated discriminant function in the consumer credit decision making will decrease bad debts, will help to set risk based credit pricing for the clients and will make the credit granting faster and more accurate.
About the Authors
T. D. Nguyen
Banking Academy of Vietnam
Russian Federation
Russian Federation
T. T. Do
Banking Academy of Vietnam
Russian Federation
Russian Federation
B. N. Nguyen
Banking Academy of Vietnam
Russian Federation
Russian Federation
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Review
For citations:
Nguyen T.D., Do T.T., Nguyen B.N. Applying Discriminant Model to Manage Credit Risk for Consumer Loans in Vietnamese Commercial Bank. Review of Business and Economics Studies. 2016;4(4):5-16. (In Russ.)
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