Applied Mathematics and Nonlinear Sciences
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Journal

Applied Mathematics and Nonlinear Sciences


Volume
& Issue

Volume 6, Issue 1


Published
on

December 27, 2021


Pages

513-522


DOI

Article

Application of Logical Regression Function Model in Credit Business of Commercial Banks

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Authors

Ying Wei Affiliation:
Nanyang Institute of Technology, Henan, 473001, China
and Hafnida Hasan Affiliation:
Applied Science University, Al Eker, Kingdom of Bahrain


Abstract

This paper takes the credit risk management of commercial banks in China as the mainline, and puts forward a quantitative model that is suitable for the credit risk management of commercial banks in China at present – Logistic regression model, and takes a commercial bank as an example, using the regression model to conduct empirical research on the credit risk of enterprises. The estimated Logistic model was tested with confirmation samples. The results show that when the cut-off point is set to 0.5, the overall correct rate of the model for the credit risk measurement of natural persons and for enterprises reaches 84.9% and 88%, respectively. When the cut-off point is set at 0.7, the overall accuracy is 89.2%. In general, the results of credit risk measurement of bank customers by the Logistic model are quite satisfactory. The Logistic Regression model is easy to understand and efficient, so it is worth popularising and putting into practice in commercial banks in China.


Keywords

Credit risk, Credit risk of commercial bank, Logistic Regression Model, 03D99


Citation

Wei, Y. & Hasan, H. (2021). Application of logical regression function model in credit business of commercial banks. Applied Mathematics and Nonlinear Sciences, 6(1), 513–522. https://doi.org/10.2478/amns.2021.1.00088
6 Total citations
0.22 FWCI
4 Recent citations
(2 years)
10 References
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