Authors:Â Ishara Devendra, Rasika Vijithasena, N.A.U.H. Jayarathna, SamindaPremarathne
Abstract:Â The banking sector is a significant part of the economy committed to holding financial assets for others. One of the critical services provided by the banking sector is the provision of loans to support individuals and businesses with their financial conditions. A bank must incur many risks due to all of its financial activities, one of which is credit risk. This research focuses on banks' credit analysis, which gives loan facilities to businesses. It empirically evaluated several data mining techniques to classify the possibility of the person or business to fulfil the obligations. The Decision tree and Naive Bayes models outperformed the state-of-the-art by offering the best performance. Finally, this study suggests that a better approach to credit risk analysis is required to maintain bank profitability.
Keyword:Â Banking Sector, Bank loans, Credit Analysis, Data mining
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