Engineering a Ruled-Based Software Solution for Credit Rating and Worthiness Assessment in Financial Operations

Abstract

In loan provision, the central worry is whether the borrower will default or payback. A good number of institutions world-wide have gone into distress owing to bad debt arising from inability to recover borrowed funds. Credit Rating is a technique that is widely used to evaluate applications tendered for credit, identify prospective borrowers, and manage existing credit accounts. This work is aimed at the development of a system capable of evaluating the credit worthiness of fund-seeking bank customers and other borrowers towards repayment capabilities of loan facility availed to them in due time. The method carefully examines who qualifies for a loan based on certain rules consisting of Payment History, Credit Owed, Credit Available, Age of Account, Crime Records, Medical Records, Amount to be borrowed.  and other factors. Percentage weights for assessment of each of these factors were proposed including threshold percentage above which credit is predicted adequate to be given. This factor creates a sort of satisfaction and level-playing field for correct assessment of lending risk.

Keywords: Credit rating, Worthiness, Financial operation, automation, Loan, Decision system