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Created 2 years ago
Credit EDA case Study
Introduction:
This case study aims to give us an idea of applying EDA in a real business scenario. In this case study, we develop a basic
understanding of risk analytics in banking and financial services and understand how data is used to minimise the risk of losing
money while lending to customers.
Problem Statement:
To identify patterns which indicate if a client has difficulty paying their installments which may be used for taking actions
such as denying the loan, reducing the amount of loan, lending (to risky applicants) at a higher interest rate
Two types of risks are associated with the bank’s decision:
* If the applicant is likely to repay the loan, then not approving the loan results in a loss of business to the company.
* If the applicant is not likely to repay the loan, i.e. he/she is likely to default, then approving the loan may lead to
a financial loss for the company.