Safety-First Oriented Decisions for the Establishment and Application of Bank Credit Granting Model: A Markovian Dynamic Programming Approach

• Main Authors: Hsien-Chang Kuo, 郭憲章
• Other Authors: Soushan Wu;Ming-Yueh Tarng
• Format: Others
• Language: zh-TW
• Published: 1995
• Online Access: http://ndltd.ncl.edu.tw/handle/51515623772702978620

博士 === 國立交通大學 === 管理科學研究所 === 83 === This dissertation proposes a credit granting model based on safety-first strategy. Our model could reduce bad debt for granting credit, enhance the quality of the loan, decrease the defect of the loan officer''s subjective, and protect the asset of banks. After a brief introductory chapter, chapter 2 compares the bank credit granting models by vary discipline, analyze different approaches for establishing credit granting models, and induce the prototype of comprehensive decision support systems for exploring system functions of our research. The methodology of dynamic programming is studied in chapter 3. Adopting cost-volume-profit analysis as a tool, that makes the optimal credit granting decisions by multi-period net cash flow basis, and provides loan officer step-by-step procedure to monitor the planning process by Markovian dynamic programming. Chapter 4 uses net cash flow concept to derive the customer''s revenue exceeding adjusted break-even point, which is an effec- tive indicator of risk measure. The portion of total revenue curve beyond the break-even point which the bank will make the safety- first oriented decisions for credit granting procedure is defined as feasible curve. The feasible curve could be referred to acceptive area. It is an important function as a safety-first oriented decision for bank credit granting that measures whether customers are likely to improve their business performance after granting the loan. Chapter 5 proposes the generalized procedure for our approach. We also propose a case study in the last section of this chapter. Finally, concluding remarks summarize our approach that provides the strategic decisions of bank credit granting and up- grade the quality of loans, and adopt some suggestions to enhance our further researches.