Volume 8 Number 9 ( Sep. 2013)
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JSW 2013 Vol.8(9): 2344-2351 ISSN: 1796-217X
doi: 10.4304/jsw.8.9.2344-2351

A Credit Risk Evaluation Index System Establishment of Petty Loans for Farmers Based on Correlation Analysis and Significant Discriminant

Linpeng Hai1, Baofeng Shi2, Guorong Peng3
1Computer Science and Technology Henan Polytechnic University, Jiaozuo, China
2School of Business Management, Dalian University of Technology, Dalian, China
3School of Preparatory Education, Hubei University for Nationalities, Hubei, China

Abstract—By the end of 2011, agricultural population in accounted for 48.73% in China. Also, farmers in China are dispersed and their financial information is incomplete, which leads to credit risk evaluation system of farmers in China is not sound at all. Most Chinese banks even have not established the rating system, so farmer credit risk rating system pressed for solution. This study proposes an index screening method based on correlation analysis and significant discriminant. The proposed method is demonstrated using the 2044 petty loans for farmers of a Chinese state-owned commercial bank’s. The results demonstrate that the proposed method can accurately screen the indicators, which can effectively distinguish default customers from non-default ones. Moreover, the results of an empirical study showed that “Loan purpose”, “Expenses/ incomes”, “Increasing rate of regional GDP” are the key indicators to distinguish default customers from non-default ones.

Index Terms—Petty loans for farmers, credit risk evaluation, index screening; significant discriminant.

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Cite: Linpeng Hai, Baofeng Shi, Guorong Peng, "A Credit Risk Evaluation Index System Establishment of Petty Loans for Farmers Based on Correlation Analysis and Significant Discriminant," Journal of Software vol. 8, no. 9, pp. 2344-2351, 2013.

General Information

ISSN: 1796-217X (Online)
Frequency: Monthly
Editor-in-Chief: Prof. Antanas Verikas
Executive Editor: Ms. Yoyo Y. Zhou
Abstracting/ Indexing: DBLP, EBSCO, ProQuest, INSPEC, ULRICH's Periodicals Directory, WorldCat, etc
E-mail: jsw@iap.org
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