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Group Name:
1. Nikunj soni
2. ManMohan Nayak
3. Naveen Samineni
4. Shaik Nisaruddin
Problem statement
If the applicant is likely to repay the loan, then not approving the loan results
in a loss of business to the company
If the applicant is not likely to repay the loan, i.e. he/she is likely to default,
then approving the loan may lead to a financial loss for the company.
Objective of Analysis
The company wants to understand the driving factors (or driver variables)
behind loan default, i.e. the variables which are strong indicators of default.
The company can utilise this knowledge for its portfolio and risk assessment
Strategy
Univariate Analysis
Bivariate Analysis
Derived Matrix
Univariate Analysis
Other and Small business have highest default to fully paid loans.
Bivariate Analysis Emp Length vs Loan Status
Grade B, C and D have defaulted more, so control in giving those grades loans.
Similarly loans given for other purpose and small businesses have more
defaulted, those can also be kept in checked.
Applications with lesser Emplyoment length have more defaults and hence
loans to them should be controlled.
Verified and Source Verified applications have defaulted more, so verification
process needs to be improved.
Higher the interest rates, higher the chances of default.
Higher the loan amount, chances of getting default is higher
Conclusions and Recommedations