However, the applying and making this Internal Credit Rating has some defects in content as: Customer classification; rating criteria,… From practical operation and research, Internal Cr
Trang 11
INTRODUCTORY
1 Rationales
According to the International Treaty about the safety standard for
capital, Internal Credit Rating has become an efficient tool for commercial
banks to manage the risk in lending and control credit risk, especially for
Agribank
According to Decision No 214/QĐ-NHNN on 30th, January, 2011
of the Governor of The State Bank of Vietnam, Vietnam Bank for
Agriculture and Rural Development (Agribank) was transformed into
State-owned one-member Limited Company As the main bank operating in the
field of agriculture, rural and farmers, credit is the major operations of the
bank: Credit surplus accounts for approximately 79% over total assets,
Income from credit activities takes up 70% total income Therefore, the
risks in the business of Agribank tend to focus on credit operations
According to Decision No 1197/QĐ-NHNo-XLRR, written on
October 18th, 2011, Agribank has been put into use, operate the Internal Credit
Rating consulted by Ernst & Young Company since 2007 and it has worked on
decreasing risks in credit operations However, the applying and making this
Internal Credit Rating has some defects in content as: Customer classification;
rating criteria,…
From practical operation and research, Internal Credit Rating
system of Agribank, the Author choose the topic of “Internal Credit Rating
according to the market segment at Agribank” to make researches and
decrease shortages on both reality and theory
2 Research objective
- General objective: Making the Internal Credit Rating Models
according to market segment
- Specific objective: Analyzing and evaluating elements come from
customers; analyzing discrepancies about the influence level of elements
from come from customers from different regions; evaluating the
practicality of applying Internal Credit Rating at Agribank in order to create
the Internal Credit Rating Model according to market segment; suggesting
solutions to complete the Internal Credit Rating system at Agribank
2
3 Objects and scope of research
3.1 Objects of research
- The thesis research Internal Credit Rating operation according to market segment to individual customers having credit relations to Agribank
in Vietnam
3.2 Scope of research
3.2.1 Space of research
Research about market segment theories; practical research about Internal Credit Rating according to market segments to enterprise customers, household customers, individual customers, financial institution customers,… of Agribank and some of the largest commercial banks in Vietnam On that basis, this offers the Credit Rating system to individual customers of Agribank according to market segment
3.2.2 Time of research
- Secondary data: The statistics system about credit and statistics in relation to customers of Agribank system and other commercial banks in Vietnam… through websites, statistics from General Statistics Office in 5 years since 2010 to 30/6/2015
- Primary data: Using questionnaire which are sent to the individual customers of Agribank in 48/63 provinces, cities in all regions of Vietnam The survey includes approximate 210 forms each market segments, performed from 11/2014 to 4/2015
4 Research Methodology
4.1 Researching Method
4.1.1 Qualitative method
The thesis uses the aggregation, analysis, statistics, comparison and experting methods to clarify and to prove the ideas and evaluations The thesis also uses the logical methodology to point out opportunities and challenges in Internal Credit Rating operation according to market segment
4.1.2 Quantitative method
Analyzing by running secondary data of Agribank and the commercial banks system for over 5 years; secondary data are collected
Trang 2directly from individual customers of Agribank with 1123 observes
completed over 1470 observes established
Applying statistical model to test and applying econometric model
to suggest models for each of the market segment
4.2 Research questions
(1) Which are the criteria for market segmentation? What are the
connections between market segment and creating Internal Credit Rating
criteria system? Influence Level?
(2) How to create the Internal Credit Rating system which adapts to
different market segments? What are the baremes to exactly evaluate
customer’s ability?
4.3 Research model
The author recommends this research model:
5 Thesis contribution
5.1 In terms of theories
The thesis systemizes general theoretical about Internal Credit
Rating, criteria, elements which have impacts on the result of Internal
Credit Rating The thesis also evaluates, measures system of criteria in
evaluating Internal Credit Rating according to market segment; other
shortages and the result of the thesis is the premise for other researchers to
Customer’s ability to repay debt (dependent variable)
Group of customer’s information with bank elements (independent
variable)
Group of Relationship between customer and bank criteria
Impact by different targets
Group of Relationship between customer and bank criteria (already influenced on customer information with bank) (Independent variable)
Influence on different targets
implement and complete the Internal Credit Rating operation at Commercial Banks in Vietnam
5.2 In terms of reality
The research results can be immediately applied in Internal Credit Rating operation at Agribank; helping researchers and banking administrators have a more detail look at a new methods in measuring and evaluating criteria of Internal Credit Rating system approached The results can be used as a useful referenced statistics system for people who care about Internal Credit Rating of Commercial banks
CHAPTER I: THE OVERVIEW OF THE RESEARCH
1.1 Some Internal Credit Rating Models
The first part of the thesis has introduced 6 well-known Credit Rating models now being used worldwide and in Vietnam According to that, the thesis has evaluated the advantages and disadvantages of these models which include:
- The Grading model: is the model which is used popularly by Credit Rating agencies worldwide such as: Moody’s; Standard and Poor; Fitch
- The Scoring model of Altman: is a quantitative model according to the modeling of relationships between variables thereby reflecting credit quality and those elements which affects credit quality from the customers
- The Logistic model: Is a mathematical regressive model in which the variable (Y) is a dependent variable and all others are independent
- The Personal Credit Scoring model of FICO: Is a means of credit control attached to each individuals in some developed countries, assisting credit organization to estimate credit risk
- The Personal Credit Scoring applied for retail banks in Vietnam (2006)
- The Individual Credit Rating of Ernst & Young (E&Y)
1.2 Some scientific paper involving in Internal Credit Rating
The thesis has presented 5 other PhD thesis involving in Internal Credit Rating Operations of Commercial Banks in Vietnam These contents are presented from 1.2.1 to 1.2.5 From those, author has brought ideas,
Trang 35 opinions and evaluation about the advantages and disadvantages of Internal
credit rating
1.3 Some articles, researches involving in Credit Rating
The author has done some researches and represented 12 scientific
paper and published on world famous magazine involving in Credit Rating
1.4 The gap between researches
On the base of researching different models, researches and articles
about Credit Rating, the author has discovered some problems to delivery
research on
Firstly, Credit Rating methods, making criteria system, bareme and ratings
in Commercial banks are different from each others
Secondly, Internal Credit Rating system is not made for different kinds of
group of objects
Thirdly, the criteria in Credit Rating system are often identified using the
experting method, thus the final results remain some shortages
Fourthly, the group of individual customer is not completely focused
CHAPTER II: THEORETICAL BASE AND THE REALITY OF
INTERNAL CREDIT RATING ACCORDING TO MARKET
SEGMENT OF COMMERCIAL BANKS IN VIETNAM
2.1 Market segments of commercial banks
2.1.1 Market of commercial banks
From researches about theory of the market, the author has
generalized the market of commercial banks is a place where customers are
guided and satisfied with their banking and financial services using
2.1.2 Market segment for Commercial banks
On the researching basis involving in market segment, the author
has brought the definition of market segment for Commercial bank:
“Market segment for Commercial bank is the dividend of customers into
different smaller groups of customers who have the same routines or
culture or hobby; or who have the same potential credit ability, etc
The thesis has analyzed and pointed out: market dividing plays an
important role in business in general and in risk management in specific
6 That role specifically expresses in 4 contents: identifying customer’s choice; customer’s credit demand orientation; early identifying the ability
of finishing duties of customer; predict, prevent and cope with credit risk
2.1.3 Market segment basis
The thesis has presented criteria which are often used in market segment One of them is segmentation according to economic region The thesis has mentioned Circular No 193/UB-VP on 11/2/1963 which is about doing research on economic region dividend In different periods, for the sake of economic develop, Vietnam economy has divided the economic into different regions At present, the General Statistic Office has made surveys on the statistics of the economic and the population of 63 provinces which are divided into 7 regions which are: (1) The Northern midlands and mountainous area (including 14 provinces); (2) The Red River Delta (including 11 provinces); (3) The North Central area (including 6 provinces); (4) The Central Coastal area (including 8 cities and provinces); (5) The Central Highlands (including 5 provinces); (6) The South East (including 6 provinces); (7) The Mekong River Delta (including 13 provinces)
The thesis has summarized some common features of these 7 regions and researches and statistics evaluation have been made to identify the discrepancies of the impact of the criteria on customer debt repayment ability using the model in Chapter IV and Chapter V according to market segment of Agribank
2.1.4 Reality of Vietnamese economic region dividing
At present, in Vietnam, the economic regions are usually divided
by geographical dividend; resident qualification or by income
2.2 Internal Credit Rating in commercial banks
2.2.1 The Internal Credit Rating definition
By doing researches on theories and reality about Credit Rating, on the aspect of an researcher on Internal Credit Rating Operation of one Commercial Bank, the author has brought the definition: Internal Credit Rating is a risk measurement tool of Commercial Bank on the basis of analyzing, evaluating, rating customers through the customers’ information
Trang 42.2.2 Internal Credit Rating Method
At present, Commercial Banks usually use 2 Internal Credit Rating
Methods which are experting and econometric method Especially, the
econometric method including 2 main models which are Logistic regressive
models and factor analysis model The thesis also pointed out the
advantages and disadvantages of the 2 mentioned methods
2.2.3 The role of risk management in credit operation at
Commercial Banks
The role of risk management in credit operation at Commercial
Banks specifically expresses such as Decrease and Prevent credit risk in the
bank; decrease the damage, help customer avoid risk in credit operation and
in finishing debt obligation therefore contribute to the stability and
development of the whole society
2.2.4 The role of Internal Credit Rating in credit risk
management at Commercial Banks
The thesis has quoted the definition of bad debt from Basel
Committee about bank supervision (2005) which exaggerate the most
important operation in bad debt management which is increase solutions to
prevent bad debt increasing The author has pointed out 8 solutions to
conduct to prevent credit risk, 4 of which has been applied in Internal
Credit Rating operation It could be said to be one of the most important
solutions which help Commercial Banks classify customers and make the
efficient credit decision
2.3 Internal Credit Rating according to market segment of
Commercial Bank
2.3.1 Internal Credit Rating according to market segment of
Commercial Bank Definition
On the definition basis about Internal Credit Rating of one
commercial bank at 2.2.1 and the definition about market segment at
2.1.2.2, the author has brought the definition that Internal Credit Rating
according to market segment is rating and evaluating the ability of repaying
debt of the credit customer of one commercial bank based on the criteria
system which suit for the customer’s features on each segment which are
suitable for the bank’s operation
2.3.2 Internal Credit Rating according to market segment Features
There are 3 features: (1) Internal Credit Rating system created based on internal market segment of commercial bank; (2) Internal Credit Rating system which has suitable criteria system for groups of customers in the same segment; (3) different criteria system on different segment
2.3.3 The role of Internal Credit Rating according to credit customer in limiting credit risk at commercial bank
The role of Internal Credit Rating according to market segment has been analyzed in detail and presented in 3 main content: The role in credit risk management; in customers management and in policy planning
2.4 The reality in Internal Credit Rating according to market segment operation at commercial banks in Vietnam, experiences
2.4.1 The foundation and development of Internal Credit Rating according to market segment in commercial banks in Vietnam
The foundation and development of Internal Credit Rating is divided into 2 periods: The period of implementation of the centered and planned economy (from 1952 to 1988) and the period of gradually open economy converted to market mechanisms (from 1989 to date)
From 1989 to present, State bank of Vietnam has established many rules to control and manage the bad debt situation at commercial bank Enterprise Credit Rating was first mentioned in Decision No 57/2002/QD-NHNN to solve the bad debt rapidly, make the finance healthier, reduce risk for credit organization and enterprise and improve credit growth for the economy
2.4.2 The reality in Internal Credit Rating according to market segment operation in some commercial banks in Vietnam
The Internal Credit Rating system in Commercial Bank in Vietnam nowadays is usually created for 4 groups of customers: enterprises; individuals; individual businesses; financial institution The author has modeled the grading Internal Credit Rating of commercial bank in Vietnam using this model:
Trang 5Model 1.2: Internal Credit Rating according to segment model in commercial banks in Vietnam
individual loan for
consumption customer
individual business
customer
enterprise
customer others
collecting information
- Family/household
- The possibility of debt repayment
- Collateral
- BY INDUSTRY SEGMENT
- BY SCALE SEGMENT
- BY POSSESSION SEGMENT
Grading according to criteria system
Summarize customer rating
Grading objectives segment
- Financial Criteria
- Non-financial Criteria
10
On basis of researching reality of segmenting Internal Credit Rating of some big commercial bank in Vietnam, the author has come to a conclusion: Internal Credit Rating of commercial banks in Vietnam had market segment However, the segmenting is still simply and only focus on enterprise customer
2.4.3 Assessment of reality of Credit Rating according to market segment operation at some commercial banks in Vietnam
By assessing the reality of Credit rating operation at commercial banks in Vietnam, the author has achieved some results such as: Creating index system, bareme which are in detail; dividing customers into the ability of using and repaying loan; assessing customers with varied perspectives
Besides, the thesis has confirmed that the Internal Credit Rating operation in commercial banks in Vietnam has 4 basic limits and pointed out the origin of each limit such as: (1) lack of unification in creating Internal Credit Rating of commercial banks; (2) criteria system has not yet created based on the influence level on loan use and repay ability of the customer; (3) lack of local influence element; (4) the limit of applying IT in credit risk prevention of commercial banks
2.4.4 Experience for Agribank
Agribank need to complete the Internal Credit Rating system in 3 ways:
Firstly, it is necessary to create the market segment based on seriously
assessing different elements of local, environment, etc which is the foundation to create the Internal Credit Rating system
Secondly, the criteria system created must be suitable for each segment
based on quantificating the criteria through applying economic mathematics model
Thirdly, it is necessary to synchronize the technology system to decrease
the sensation elements influencing credit rating markers
Trang 6CHAPTER III: THE REALITY OF INTERNAL CREDIT RATING
ACCORDING TO MARKET SEGMENT AT AGRIBANK
3.1 Agribank overview
3.1.1 The foundation of Agribank
From the foundation on March 26th , 1988 to October 10th, 1996,
Agribank had its name changed twice: According to Decree No 53/HDBT
on March 26th, 1988, it was named Vietnam Bank for Agriculture, after
that, the name was Vietnam Bank for Agriculture and Rural Development
and Agribank in English On January 31st, 2011, according to Decision No
214/QD-NHNN, Agribank was transformed into one-member Ltd State
own 100% capital Company
Model organizational structure of executive management of
Agribank is modeled as below:
MEMBER COUNCIL
CONTROL
BOARD
GENERAL DIRECTOR
RISK MANAGE MENT COMMITT
EE
DEPUTY GENERAL MANAGER
UNITS CENTERS SYSTEM
JOINT-VENTURE BANKS,
COMPANIES
EXCHANGES, BRANCHES SYSTEM TYPE I,II
BRANCHES SYSTEM TYPE III, TRANSACTION OFFICES
INTERNAL CONTROL BOARD
HUMAN
RESOURCES
COMMITEE
MEMBER COUNCIL ASSISTING DEPARTMENT ASSETS
MANAGEM ENT COMMITTE
3.1.2 Overview of Agribank operation
Until July 31st, 2015, the total assets of Agribank was over 797.959 billion VND, the total liabilities was over 742.473 billion VND; the total authorized capital was 29.605 billion VND; the total loans was 607.242 billion VND; there was approximately 40.000 personnel There was 2.300 branches and transaction rooms and 4 million customers including about 3.4 million individual customers which took up 85% and 0.6 million individual business and enterprise customers which took up to 15% The IT system, scale, processing speed and total average transaction processing speed is the greatest in commercial bank system of Vietnam Agribank business was flexible by distributing a variety range of products from traditional to modern ones and there was 253 of those
3.1.3 The business performance of Agribank
Until April 30th, 2014, Agribank was the leader of the commercial bank system on the market share in terms of: capital raising, credit, card issued which respectively took up to 16.6%, 17% and 20%
Chart 3.2: the capital raising market share of some commercial bank in
Vietnam until December 31 st , 2014
Agribank
Other state-owned commercial banks Joint-stock commercial banks
43.8
39.6%
16.6%
Trang 713
Agribank NHTM quốc doanh NHTM cổ phần 32%
17%
51%
Chart 3.3: The credit market share of commercial bank system in
Vietnam until December 31 st , 2014
By credit investment, Agribank has contributed to poverty
elimination, economic development and policy implication
3.2 The reality Internal Credit Rating according to market segment
operation at Agribank
Creating and completing Internal Credit Rating system is one of the
biggest solution which will help Agribank exactly assess the ability of
capital using and debt repayment of the customers in order to effectively
prevent credit risk in the system
3.2.1 The reality of credit market segment at Agribank
Currently, there are not any documents about credit market
segment However, documents system involving to credit operation and
credit customers market segment analysis was clearly divided in each
guidance document involving to credit operation Beside credit segment
customers below, Agribank also manages the credit operation on 10 regions
at Annex 23 attachment
With the credit management dividend method of Agribank, its
market segment is quite similar with the way The General Statistics Office
divide economic regions which was presented at Chapter II
3.2.2 The reality of Internal Credit Rating according to market
segment operation of Agribank
Implementing regulations at Article 7 Decision No
493/2005/QD-NHNN on April 22nd, 2005 issued by State Bank, Agribank promulgated
Decision No 1197/QD-NHNNo-XLRR which guided how to use and
14 operate the Internal Credit Rating system The Internal Credit Rating system of Agribank was created based on the segment of 5 groups of customers: (1) Enterprises; (2) Individual; (3) Farm Household; (4) Household Business; (5) Financial Institution
With each of the groups above, Agribank has a distinct procedure and criteria system
The author has aggregated the Internal Credit Rating according to customers segment procedure of Agribank which will be presented below:
The thesis has described the scoring stages, criteria set, scoring methods, bareme of groups of customers in detail Such as:
- The enterprise customers is scored by using the method of assessing financial criteria and non-financial criteria, which were created
Customer segment
Enter financial, non-financial information
Individual customer Economic organization/
institution customer
Enter personal data;
debt repayment ability;
business plan
Rating, classify debts Report
customer rating
Collateral rating Summarize and
make decision
Customer information Register
Trang 8based on 34 branches divided into 10 groups Each criteria set has 60
criteria including 14 financial criteria and 46 non-financial criteria with 7
stages
- With individual customers, Agribank created a unique criteria set
to rate used for all the individual customers The criteria sets include 20
criteria divided into 3 parts: personal data (12 criteria); the ability of debt
repayment (4 criteria); collateral information (4 criteria)
- With farmer customers, Agribank only created 01 criteria system
for scoring including 22 criteria
- With business units customers, Agribank created enormous criteria
sets and scoring methods including 55 criteria divided into 4 big parts
- With financial institution, there are 2 criteria sets: financial
criteria set and non-financial criteria set
3.2.3 Some circumstances of scoring borrowers at Agribank
In the research range presented at Chapter I, the subject the author
chose to research was the individual consumer at Agribank The author did
research some circumstances of individual consumer in detail at Agribank
from the beginning of 2012 to 2014 The result of research on the reality of
Internal Credit Rating at Agribank on individual customers show that there
are some cases: the credit rating was very good but there were still bad
debts and vice versa
Customer rating
Total customers
at Bank A
NQH trong 12 tháng
%overdue debt customer/total customers
3.3 Assessing the reality of Internal Credit Rating according to market segment operation at Agribank
3.3.1 Achievements
The Internal Credit Rating according to market segment operation
at Agribank has achieved some results which are presented in the 6 following contents: Scoring model for Internal Credit Rating at Agribank was created according to the instruction of The State Bank; Agribank has created criteria to identify, measure, control risk and step by step increase risk management according to the international standard; having established policy documents about debt classifying and risk provisioning; having segmented customers into 4 groups; credit rating system for enterprise customers has created based on customer segments such as branch, scale and form of business ownership
3.3.2 Shortcoming & Causes
- Because of the large quantity of customers, there are quite many difficulties in implement Internal Credit Rating documents
- When scoring the Internal Credit Rating, some criteria are not suitable and influenced by sensation
- The scoring system and the bareme are not clearly calculated, it is because the criteria has not been assessed by experting method
- Market segment in Internal Credit Rating is only clearly implemented for enterprise customers
From the below analysis shown, Agribank need to overcome difficulties in order to improve the Internal Credit Rating system
CHAPTER IV: RESEARCHING, MAKING SURVEY AND DATA
PROCESSING PROCEDURE 4.1 Researching procedure
Chapter IV presented researching procedure including:
- Describe how to create scale;
- Set up questionnaire;
- Preliminary survey, primary survey
- Data analysis
Trang 917
4.1.1 The Qualitative analysis result
Qualitative analysis includes
- Making the preliminary scale: preliminary survey scale was made based
on aggregating information from bank; general researches in Chapter I;
criteria system presented in individual credit rating system of commercial
banks in Chapter II Researching questions used questionnaire from
customers
- Expert interview: to reassess the suitability of surveyed criteria The
experts suggest the necessity of the criteria as well as adding or removing
others in the official research
- Preliminary interview: The preliminary interview is implemented at
Agribank branches in the country, each branch interview 2 leaders about
the criteria used in researching
4.1.2 Quantitative research
Sample survey: Number of established: 7 (branches) * 30
(customers) * 7 (regions) = 1470 samples
Individual customer list at each region was surveyed based on
random selection from customer list of branches in 7 regions The survey
result was 1400 collected including 1123 valid Data collected from valid
samples were encrypted and analyzed
The suggested model is logistic regressive with 2 signals This
model is convenient for calculating the customer possibility of customer in
the characteristic of target variable and measuring the impact of factors (in
the role of independent variable)
Including: each target variable Y is correspond with 1 model that
independent variables are selected if the correspond factor can change the
possibility of status The model formula is:
With factors which are presented using qualitative variables, we
can point out the discrepancies of those qualitative variables by using the
following formula:
In this research, the author selected coefficient P value (sig) < 0.1
which ensures the reliability for statistical tests
18
Model 4.1: The impact of factors on customer debt repayment ability
4.2 Data analysis results
The thesis has implemented and presented the analysis results through 4 parts: the statistics of the features of survey subjects at 4.2.1; the statistics of the description of the bank relation factors at 4.2.2; the analysis results of how customers’ features influence on their relations with the bank
at 4.2.3; the analysis results of how bank relations influence on the customer debt repayment ability at 4.2.4
The aggregated result show that the models assessing the customer debt repayment ability using the variables of the relation between customer and bank has high suitablity and trustworthy and it is also suitable for analyzing the content above
CHAPTER V: THE MODEL OF INTERNAL CREDIT RATING ACCORDING TO MARKET SEGMENT AT AGRIBANK, RESULTS AND SOME RECOMMENDATIONS 5.1 Suggestions for the Internal Credit Rating according to market segment at Agribank
5.1.1 The basis theory about customers segment who have credit relation at Agribank
Based on the theory of the research overview at Chapter I and the market segment at Chapter II, the author clearly pointed out the research
Gender
V01
V24 Age
V25
…
V30
DEBT REPAYMENT ABILITY
Trang 10orientation on Internal Credit Rating according to market segment of the
thesis: The customer objectives segmented are those who have consumer
loan in Vietnam and 7 regions:
(1) The Northern midlands and the mountainous area including: Son
La, Dien Bien, Lai Chau, Lao Cai, Ha Giang, Cao Bang, Lang Son,
Hoa Binh, Yen Bai, Phu Tho, Tuyen Quang, Thai Nguyen, Bac
Giang, Bac Kan
(2) The Red River Delta including: Vinh Phuc, Bac Ninh, Ha Nam,
Hung Yen, Hai Duong, Hai Phong, Thai Binh, Nam Dinh, Ninh
Binh, Ha Noi, Quang Ninh
(3) The North Central area including: Thanh Hoa, Nghe An, Ha Tinh,
Quang Binh, Quang Tri, Thua Thien Hue
(4) The Central Coastal area including: Da Nang, Quang Nam, Quang
Ngai, Binh Dinh, Phu Yen, Khanh Hoa, Ninh Thuan, Binh Thuan
(5) The Central Highlands including: Gia Lai, Dak Lak, Dak Nong,
Lam Dong, Kon Tum
(6) The South East including: Binh Phuoc, Tay Ninh, Binh Duong, Ho
Chi Minh City, Ba Ria Vung Tau, Dong Nai
(7) The Mekong River Delta including: Long An, Tien Giang, Ben
Tre, Tra Vinh, Vinh Long, Dong Thap, An Giang, Kien Giang, Can
Tho, Hau Giang, Bac Lieu, Soc Trang, Ca Mau
5.1.2 Model suggestions
By researching and implementing model at Chapter IV, models are
used as followed:
• Customer’s relations status assessing model according each target
variable – logistic regression model using variables from V24 to
V30 (correspond with questions 24 to 30) The analyzed results can
set up the customer segment frame in 2 ways:
• The first is dividing possibility level of the status from bad to good
(or vice versa) according to each region
• The second is scoring each status of explanation variable based on
customer rate at different status of the target variable according to
each region
5.2 The logistic model of Internal Credit Rating following market segment processing result
5.2.1 Criteria system of each segment analysis
The thesis has presented the result of the influence level and the comparison of the influence of 30 criteria in each region The result show that the criteria of the influence on the customer debt repayment ability in each region are different The inspection results are suitable with the qualitative analysis in each region at Chapter II
5.2.2 The criteria segmenting result
The thesis has presented the result of implementing Binary regression logistic analysis method with the dependent variable is the customer debt repayment ability and the independent variables are those which describe the relations with the customers The result is the influence
of the factors in group relation with the bank in 7 regions (including the influence of 23 personal data criteria in each region)
5.2.3 The customer scoring logistic model combination
The method which determine this possibility is implemented in 5 steps:
Step 1: Collecting customer information Step 2: Estimating the possibility of variables featured by the relations with the bank using the results of 5 regressive models
Step 3: Calculating the values of variables showing the relations between the bank and the customers
Step 4: Calculating the possibility of overdue principals Step 5: Rating each customer
All of the above steps are implemented on one file which calculates each customer using their information automatically The file consists of 2 sheets: Customer information sheet includes the encrypted information; The other is used to determine values: The possibility of overdue debt, rating on the calculation basis With customers in each region, the index as well as the coefficient is determined based on each different region
The thesis has presented the method of scoring Internal Credit Rating of the customer by performing 1 specific example