This year at SAMIBC2020 we are pleased to announce another of our presenters, Edwin Baidoo from Tennessee Technological University. Edwin will be presenting the paper Profit-Based Credit Model with Risk-Averse Lending.
Presentation Abstract: The objective of this paper is to consider credit scoring models that address the profit maximization objective and risk aversion on part of the lender. A review of the literature on credit scoring models suggests that the focus of most of the studies has been on estimating/predicting the credit default risk and on actions to mitigate the potential loss due to default. This emphasis has shifted in recent years with credit models that take into account the profit motive of the lender. The results of the credit model discussed in this paper show that the profitability approach yields better results compared to the model that considers only the default risk. We find that this is valid even when the lender exhibits risk aversion.
Join us in Nashville, Tennessee to see this great paper and many more March 19 – 21, 2020. For registration information visit www.samnational.org/conference.