Rating microfinance products consumers using artificial neural networks

Abstract

Assessing the loan repayment capacity of a client is the most Obsession of Financial institutions. In fact, loan portfolio management is optimal when incapable clients are identified and dismissed from the outset. This reduces delinquency and radiation, and thus increases the profitability of financial institutions. This paper presents an approach that uses artificial neural networks for the rating of corporate clients offering microfinance services. We started our work with a survey of several microfinance companies to understand closely the problems encountered by using customer-rating tools, and then we have used data analysis tools to explain the results of the survey. After that, we have collected masse of data containing real customer profiles provided by partner companies. Then, we have filtered and studied this data to create a learning database for the artificial neural network-based scoring system. Finally, we have designed an expandable, flexible, versatile and configurable scoring system.