Loan risk assessment based on Pythagorean fuzzy analytic hierarchy process

Abstract

Risk assessments are increasingly being applied to financial institutions and banks, especially on loan risk assessments. When deciding to approve the applicant's loan or not, financial institutions or banks need to assess whether the lender has the loan conditions. Usually this is a very difficult decision. In this paper, a new integrated approach Fuzzy Pythagoras Scoring (FPS) model, including Pythagorean fuzzy analytic hierarchy process (PFAHP) and fuzzy comprehensive evaluation (FCE), is used for personal loan risk assessment. The risks of decision analysis in loans are assessed by the proposed method. Comparing the results of the traditional analytic hierarchy process (AHP) and PFAHP, it shows that the method can obtain reliable evaluation results and evaluate personal loans more accurately.