Building a model to predict likelihood of default for a bank

Abstract

Any bank in today’s time receive a large set of applications from individual customers for consumer / retail loans like housing loan, car loan etc. In the rural setting, the probability of a customer defaulting on its loan obligation is very high. Hence, it becomes very important for banks, in the current scenario, to be able to predict which all customers might default in the future. Given the competitive environment under which the banks operate, this helps a bank in being sustainable.