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Credit Risk Assessment for Motorcycle Loan Application: A Fuzzy Logic Approach


Roman Alex F. Lustro
Abstract

Motorcycles can be owned at equitable prices, the growing demand for motorcycles has put the Philippines in the limelight as the fastest-growing motorcycle industry in the Southeast Asian Region. Its popularity in the middle class seeing motorcycle as efficient and cost-effective for both personal and business use which can be easily acquired through credit or loan. This study aims to create a model for credit scoring and credit risk assessment using a fuzzy logic approach that will aid the credit investigator in appraising the customer applying for a motorcycle loan. Fuzzy Logic Approach is effective in modeling applications that require human conviction and can be used in appraising loan applications. Subsequently, rules are defined to help in the evaluation which will aid in determining High Risk, Medium Risk and Low Risk to prospect customers. Results show that fuzzy system could get good output for assessing customers applying for a motorcycle loan. Since assessment will be centered on the information submitted by the clientele. In addition, expert dependence and can be minimized.

Volume 11 | 12-Special Issue

Pages: 1246-1252

DOI: 10.5373/JARDCS/V11SP12/20193332