AHP APPLICATION IN A FINANCIAL INSTITUTION

Abstract

This paper deals with the application of the Analytic Hierarchy Process (AHP) to solve decision making problems in the Development Bank of Ethiopia project financing process. This paper presents an AHP model to select the most feasible project among alternatives. The model has seven criteria including: technical, market and demand, financial, socio-economic, institutional, discounting and non-discounting factors. For these main criteria there are twenty seven sub-criteria. The application of this method in a financial institution ensures reduction of the project evaluation time and increases reliability of the decision made. Furthermore, since the decision made can be traced back to the model at any time, the new method will reduce corruption and promote employees’ confidence