The use of conjoint analysis to review the attractiveness of credit conditions
Journal Title: Acta Economica - Year 2012, Vol 10, Issue 16
Abstract
The increase in aggregate demand is one of the primary goals of every economy. By achieving this goal, many positive effects in economy are also achieved which is manifested through increase in consumption, investment and creating a better social environment. The state has the key role in achieving this goal, with its instruments and policies it directs economy toward demand increase. Although all economies aspire to this goal, many are not in position to realize the goal they have set for themselves. The alternative, in an effort to increase aggregate demand, may be the banking sector. Increase in volume of loans directly influences the growth of demand. Commercial banks, like all companies, strive to continually increase their value on the market and to better position themselves. One way to succeed in doing so is to increase the income. Given the specificity of commercial banking, their goal is achieved, inter alia, by improving of lending. In order to increase income on this basis, a very important prerequisite is the formation of attractive credit offers with the strong emphasis on respecting the views of clients on this issue. To respect and value clients` views means identifying key factors and adjusting the offer to them. The power of conjoint analysis is that it allows us to get the answer to this problem. The algorithm of this analysis is a multivariate procedure to measure the preferences of bank clients regarding the loan attributes. Conjoint analysis relies on a survey of bank clients with the representative set of attributes that are ranked according to clients` preferences. Obtained quantitative informations can be used to model the credit offer. For example, one commercial bank is interested in forming a new attractive credit offer and wants to study the influence of several factors (attributes) on client preferences in order to determine which factor is the most important one.
Authors and Affiliations
Дарко Милуновић, Дарија Милуновић
Keywords
Related Articles
- EP ID EP43743
- DOI -
- Views 263
- Downloads 0
REFLECTIONS OF THE EU EXCISES POLICY ON DYNAMICS OF ASSOCIATION OF BIH IN LIGHT OF GLOBAL CHALLENGES
Dedication of Bosnia and Herzegovina to European integrations requires a fulfilment of pre-accession obligations that relate to harmonization on excises taxation in BiH with the EU standards. Excise represents significan...
The new regulation of rating agencies and its influence on financial markets
The crisis in global financial markets, in the last year, has evolved into a crisis of the euro zone. In the countries of the European Union, especially in political discussions of “Euro-politicians” rating agencies are...
ASSESSMENT OF THE CREDITWORTHINESS (CREDIT RATING) AND CREDIT RISK OF THE POTENTIAL LOAN APPLICANTS – COMPANIES IN THE REPUBLIC OF SRPSKA, USING LINEAR DISCRIMINATORY FUNCTIONS
One of the scientifically proven and effective methods for managing credit risk is a credit rating system based on clientʹs solvency. The model for the credit rating of bank customers presented in this paper is based on...
PUBLIC‐PRIVATE PARTNERSHIPS AS FUNCTION TO OVERCOME CURRENT FINANCIAL‐ECONOMIC CRISIS
Contemporary globalization trends and processes of regional connecting national trades, and particularly more successful implementation of integration into the European union, impliy the need for huge investments into in...
CHALLENGES OF STOCK MARKET TRADING UNDER CRISIS CONDITIONS
Under crisis conditions stock exchange and stock market trading become the breaking point where interests of investors, issuers, speculators and hedgers meet. Adequate and reliable functioning of stock market and its mar...