Algoritma Alumni Profile
Regita Anggriani
Project Description:
Credit is an integral part of the modern economy and the global financial system. In order to maximize the risk faced by lending company by maintaining credit risk exposure, credit management and analysis is needed. Credit risk refers to the probability of loss due to a borrower’s failure to make payments on any type of debt. Credit risk management is the practice of mitigating losses by understanding the adequacy of a lending company’s capital and loan loss reserves at any given time. Credit Risk Management is important for lending company as it ensures that the borrower has a good credit standing, the capability to repay their debt, is run and managed by good personnel, forms a part of performing industry, is complaint with regulatory and legal requirements and importantly has not defaulted or is delinquent in other obligations.
Effective credit analysis, while by no means a guarantee against default, can help to manage default risk and significantly lower the probability experiencing the high magnitude loss event. One of way to analyze the credit risk is by doing credit risk modeling to identify demographic and behavioral characteristics associated with likelihood to default. Credit risk modeling is quite important for lending company because it helps them to improve their business and at the same time serve customers better. By being aware of and monitoring credit risk, lending company are equipped to determine their lending priority/classification to avoid incurs a loss.
