Default risk of Icelandic consumer loans : implementation of a credit risk model
Online consumer lending in Iceland has seen significant growth in the past years. With online applications and live data monitoring comes more access to useful data that has the possibility of improving the assessment of default risk. If assessment of default risk can be improved, the opportunity fo...
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ftskemman:oai:skemman.is:1946/33990 2023-05-15T16:50:15+02:00 Default risk of Icelandic consumer loans : implementation of a credit risk model Jón Þórarinn Úlfsson Grönvold 1993- Ólafur Freyr Ólafsson 1996- Háskólinn í Reykjavík 2019-05 application/pdf http://hdl.handle.net/1946/33990 en eng http://hdl.handle.net/1946/33990 Viðskiptafræði Hagfræði Neytendalán Áhættugreining Rafræn viðskipti Business administration Economics Loans Risk assessment E-commerce Thesis Bachelor's 2019 ftskemman 2022-12-11T06:49:42Z Online consumer lending in Iceland has seen significant growth in the past years. With online applications and live data monitoring comes more access to useful data that has the possibility of improving the assessment of default risk. If assessment of default risk can be improved, the opportunity for offering a broader range of interest rates on these loans come available, resulting in a more accurate pricing of each loan based on the estimated default risk of each borrower. The results indicate that a logistic regression model can improve the assessment of credit risk. Using alternative data sources, in particular loan application data, can also prove to be of additional benefit when assessing the probability of default. A reduction of type II errors, lowering the number of defaulted borrowers in the portfolio of a credit lender does however come at the cost of forgoing borrowers that would otherwise be able to pay off their loans, that is an increase of type I errors. Thesis Iceland Skemman (Iceland) |
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Open Polar |
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Skemman (Iceland) |
op_collection_id |
ftskemman |
language |
English |
topic |
Viðskiptafræði Hagfræði Neytendalán Áhættugreining Rafræn viðskipti Business administration Economics Loans Risk assessment E-commerce |
spellingShingle |
Viðskiptafræði Hagfræði Neytendalán Áhættugreining Rafræn viðskipti Business administration Economics Loans Risk assessment E-commerce Jón Þórarinn Úlfsson Grönvold 1993- Ólafur Freyr Ólafsson 1996- Default risk of Icelandic consumer loans : implementation of a credit risk model |
topic_facet |
Viðskiptafræði Hagfræði Neytendalán Áhættugreining Rafræn viðskipti Business administration Economics Loans Risk assessment E-commerce |
description |
Online consumer lending in Iceland has seen significant growth in the past years. With online applications and live data monitoring comes more access to useful data that has the possibility of improving the assessment of default risk. If assessment of default risk can be improved, the opportunity for offering a broader range of interest rates on these loans come available, resulting in a more accurate pricing of each loan based on the estimated default risk of each borrower. The results indicate that a logistic regression model can improve the assessment of credit risk. Using alternative data sources, in particular loan application data, can also prove to be of additional benefit when assessing the probability of default. A reduction of type II errors, lowering the number of defaulted borrowers in the portfolio of a credit lender does however come at the cost of forgoing borrowers that would otherwise be able to pay off their loans, that is an increase of type I errors. |
author2 |
Háskólinn í Reykjavík |
format |
Thesis |
author |
Jón Þórarinn Úlfsson Grönvold 1993- Ólafur Freyr Ólafsson 1996- |
author_facet |
Jón Þórarinn Úlfsson Grönvold 1993- Ólafur Freyr Ólafsson 1996- |
author_sort |
Jón Þórarinn Úlfsson Grönvold 1993- |
title |
Default risk of Icelandic consumer loans : implementation of a credit risk model |
title_short |
Default risk of Icelandic consumer loans : implementation of a credit risk model |
title_full |
Default risk of Icelandic consumer loans : implementation of a credit risk model |
title_fullStr |
Default risk of Icelandic consumer loans : implementation of a credit risk model |
title_full_unstemmed |
Default risk of Icelandic consumer loans : implementation of a credit risk model |
title_sort |
default risk of icelandic consumer loans : implementation of a credit risk model |
publishDate |
2019 |
url |
http://hdl.handle.net/1946/33990 |
genre |
Iceland |
genre_facet |
Iceland |
op_relation |
http://hdl.handle.net/1946/33990 |
_version_ |
1766040415850463232 |