Neuro-Based Artificial Intelligence Model for Loan Decisions

Authors:
  • SEShorouq F. Eletter
    Shorouq F. Eletter
  • SYSaad G. Yaseen
    Saad G. Yaseen
  • GEGhaleb A. Elrefae
    Ghaleb A. Elrefae
Open Access
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Abstract
Problem statement: Despite the increase in consumer loans defaults and competition in the banking market, most of the Jordanian commercial banks are reluctant to use artificial intelligence software systems for supporting loan decisions. Approach: This study developed a proposed model that identifies artificial neural network as an enabling tool for evaluating credit applications to support loan decisions in the Jordanian Commercial banks. A multi-layer feed-forward neural network with backpropagation learning algorithm was used to build up the proposed model. Results: Different representative cases of loan applications were considered based on the guidelines of different banks in Jordan, to validate the neural network model. Conclusion: The results indicated that artificial neural networks are a successful technology that can be used in loan application evaluation in the Jordanian commercial banks.

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