AN INVESTIGATION INTO DESIGN AND IMPLEMENTATION OF A COMPUTERIZED LOAN MANAGEMENT SYSTEM FOR REFUSING OR APPROVING LOAN REQUEST USING CREDIT RISK AND EVALUATION MODELS.
- Project Research
- 1-5 Chapters
- Qualitative
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- Abstract : Available
- Table of Content: Available
- Reference Style: APA
- Recommended for : Student Researchers
- NGN 3000
BACKGROUND OF THE STUDY
Small businesses and individuals have access to loan services provided by financial institutions thanks to a number of reforms that were implemented in response to a variety of concerns about the banking sector (Kimuyu, 2019). This project intends to design and implement a computerized loan management system, with the goal of either denying or approving loan requests based on credit risk and evaluation models, as well as gaining knowledge regarding the procedure that banks all over the world follow for loan sanctioning and lending. In addition to this, it makes an effort to make use of credit risk and assessment models in order to establish a stringent approach to these areas, in order to think through policies, principles, and practices in order to carry out the new responsibilities.
When the system has been completely deployed, it will have the capacity to comprehend, think, and be fully prepared to handle the credit management work in financial institutions that is being done now as well as that which will be done in the future. In addition, there is a significant question for banks and their regulators regarding the accuracy of a model's forecasts of credit misfortunes and losses, particularly given the small number of accessible forecasts and estimates due to their typically long planning horizons.
This presents a challenge for assessing the accuracy of a model's forecasts of credit misfortunes and losses (Gaitho, 2019). We make use of credit risk and assessment to develop evaluation strategies for credit risk models that are reliant on cross-sectional data. In instance, models are reviewed and accessed based not only on their estimates throughout time but also on their projections at a specific point in time for simulated credit portfolios. This is done in order to account for the fact that the estimates change over time. After the estimates that correspond to these portfolios have been formed, they may be analyzed using a variety of statistical approaches after they have been generated.
When finished, this initiative will make it possible for loan applications to be processed quickly and efficiently in financial institutions all around the nation. When it is finished, the planned system will take the place of the manual loan application procedure and will automate the loan process for both the banks and the clients (Gisemba, 2020). Customers may now easily apply for loans without having to physically go to the bank, and if their applications are granted, they can monitor the specifics of their loans without having to leave the comfort of their own homes. The task of managing all transactions pertaining to loans in a manner that is both accurate and easy is made much simpler by the use of a loan management system that incorporates credit risk and assessment models. It is becoming more critical to include credit risk in financial and accounting systems. It takes into account predictions of company insolvency and financial difficulties, as well as corporate performance bunching and expectations, and it calculates credit risk.
The online Bank loan management system is an interface that enables a customer to apply for a loan using a digital channel that is accessible through the internet. The system also checks for the possibility of bankruptcy and credit risk estimation, and it allows the customer to track the status of their application at regular intervals. This system gives information on the customers' financial state over a period of time, as well as facts regarding their loans, an assessment of their risk, and a probable forecast of bankruptcy. The procedure of obtaining a loan in Nigeria is one that is both time-consuming and difficult (Jansson, 2022). It is possible for the examination of loan applications to take many weeks or even months before approvals are given, and individuals are required to go to the financial office in order to provide evidence and undergo customer verification.
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