An empirical study on the relationship between customersʹʹ credit rating and their financial transcripts for loan assignment

One of the most important issues on revenue management in banking industries is the assignment of loan to customers. In fact, a big portion of banksʹ revenue is from loan assignment and choosing appropriate customers for loan assignment not only reduces the financial risk but also it can increase the revenue. In this study, we perform an empirical study to find out whether customersʹ financial statements could provide enough information about customers for loan assignment. The other objective of this study is to find out whether banksʹ officials could understand about the details of customersʹ financial statements. Finally, we want to find out whether there is any relationship between unpaid loans and customersʹ credit rating. The present study is executed on an Iranian bank by distributing a questionnaire analyzing the results. The results indicate that there are some strong evidence that financial statement could help bank official determine customersʹ credit rating. The survey also concludes that highly education and experienced employees are the best people for devoting best credit rating for customers.