Development of a credit risk evaluation system using multilayer neural networks
- Material Science & Engineering International Journal
Frank Edward Tadeo Espinoza, Marco
Antonio Coral Ygnacio
This paper deals with the development of a credit risk assessment system using multilayer neural networks. The main objective of this work is to provide a decision support tool for risk assessment, considering relevant variables in the process. To achieve this objective, the backpropagation algorithm and the Adam optimizer were used to train the model. In terms of materials and methods, a training and validation data set including relevant financial information of credit applicants was used. A multilayer neural network was implemented that made predictions and calculated the loss using the categorical cross-entropy function. The results obtained during the development of the system showed a favorable performance and a satisfactory level of accuracy in identifying and classifying different levels of credit risk. However, it is emphasized that the system does not provide absolute results; human intervention is recommended as a last resort for decision making.
credit Risk, ANN, credit rating, financial assessment