For every Banking institution, credit is regarded as one of the biggest sources of revenues. On the other side, despite being a major source of revenues, the credit also serves as the source of risk, when the credit is not performing well and turn into a non-performing loan (NPL). Thus, it becomes essential to conduct an accurate and sustainable risk prevention methods in order to minimize the potential risks into the least.
The initial step for risk prevention methods in this research is by conducting a risk factors identification, distribution of questionnaires that were divided into two part in order to draw information about the weight and probility for each of the risk, constructing a causal loop diagram and followed by building a credit simulating model.
The researches and data processings are resulting these following outputs: the main problem of the risks indentified as 5C criteria which contains subrisks for each respective criteria, weights for every risk and subrisk as well as the probability
for each factor, the decision hierarchy as a result from AHP method calculation, using decision software Expertchoice, the causal loop diagram which serves as a learning medium for credit analysis, and the credit simulating model built using
dynamic modeling software Powersim which will be used as a tool to assist the execution of credit application. |