Business, Management and Accounting
3 years ago

Improved credit risk model leads to more accurate loan pricing in Iceland.

Default risk of Icelandic consumer loans : implementation of a credit risk model
Jón Þórarinn Úlfsson Grönvold, Ólafur Freyr Ólafsson

Paper Summary

Related papers

Economics, Econometrics and Finance
4 years ago

Loan forebearance programs increase delinquency rates but boost borrower reinstatement odds.

Credit Expansion
Retirement Planning
Financialization
Economics, Econometrics and Finance
4 years ago

Bank lending policies prioritize profit over loan survival, risking financial stability.

Banking Finance
Credit Risk
Bankruptcy Prediction
Business, Management and Accounting
6 years ago

Online lenders prioritize employment over default risk, risking loan repayment.

Crowdfunding Dynamics
Microfinance
Bankruptcy Prediction

Online consumer lending in Iceland has grown, leading to more data for assessing default risk. A credit risk model using loan application data can better predict default probability. This model can help lenders offer more accurate interest rates based on each borrower's risk. However, while it reduces defaulted borrowers, it may also exclude some who could repay their loans.