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Application of the SAW Method in Credit Risk Assessment

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Contemporary Trends and Challenges in Finance

Part of the book series: Springer Proceedings in Business and Economics ((SPBE))

Abstract

Credit risk assessment usually is a complex process, which consists of many successive steps and numerous criteria. Selection of good customers and rejection of potentially bad ones is vital as it directly and significantly affects the quality of bank’s credit portfolio. Also, ordering the decision alternatives is an important part of the whole decision-making analysis which takes place before making a final decision. The importance and complexity of the problem on one hand call for strictly analytical methods, however, on the other, also for a method which enables intuitive decision-making, imprecision and inaccurate linguistic ranks based on experts’ personal experience. The paper presents the utility of Simple Additive Weighting method in case of a credit risk assessment. The presented illustrative example bases on experts’ knowledge and their perception and evaluation of various linguistic, frequently imprecise criteria. Therefore, the order scale is described by trapezoidal oriented fuzzy numbers.

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Notes

  1. 1.

    A review on financial risk assessment (including credit and bankruptcy risks) can be found in Chen et al. (2016).

  2. 2.

    The personal data of experts and any data concerning the Bank as well as any business and decision-making actions involved in the process, are subject to confidentiality.

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Author information

Authors and Affiliations

  1. Poznań University of Economics and Business, Poznań, Poland

    Aleksandra Wójcicka-Wójtowicz & Krzysztof Piasecki

  2. WSB in Poznań, Poznań, Poland

    Anna Łyczkowska-Hanćkowiak

Authors
  1. Aleksandra Wójcicka-Wójtowicz
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  2. Anna Łyczkowska-Hanćkowiak
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  3. Krzysztof Piasecki
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Corresponding author

Correspondence to Aleksandra Wójcicka-Wójtowicz .

Editor information

Editors and Affiliations

  1. Department of Financial Investments and Risk Management, Wroclaw University of Economics and Business, Wrocław, Poland

    Krzysztof Jajuga

  2. Faculty of Management and Economics, Technische Universität Dresden, Dresden, Sachsen, Germany

    Hermann Locarek-Junge

  3. Department of Economics and Finance, John F. Welch College of Business, Sacred Heart University, Fairfield, CT, USA

    Lucjan T. Orlowski

  4. Department of Economics and Finance, Tallinn University of Technology, Tallinn, Estonia

    Karsten Staehr

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Wójcicka-Wójtowicz, A., Łyczkowska-Hanćkowiak, A., Piasecki, K. (2020). Application of the SAW Method in Credit Risk Assessment. In: Jajuga, K., Locarek-Junge, H., Orlowski, L., Staehr, K. (eds) Contemporary Trends and Challenges in Finance. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-43078-8_16

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