Results
Title

OPTIMAL ALLOCATION OF BANK CREDITS TO APPLICANTS IN AGRICULTURAL SECTORS.

Authors

Nahvi, Abouzar; Ghorbani, Mohammad; Sabouhi, Mahmoud; Dourandish, Arash

Abstract

Credit portfolio management is one of the fundamental aspects of banking that can lead to the loss of bank revenue if not properly managed. The expected return and risk in the choice of portfolio cannot be accurately predicted. Considering this impossibility and given the limitations faced by the banking system, this article uses the concept of interval numbers in the Fuzzy Set Theory to extend the Markowitz mean variance model to a non-linear interval multi-objective model. Three strategies were presented in this model, including optimistic, pessimistic, and mixed strategies, and the Genetic algorithm was used to solve the model. This model was ultimately examined at Keshavarzi Bank to determine the optimal credit portfolio. The results showed that this bank's current credit distribution model is different from the estimated optimal model. The present findings can provide managers with a roadmap for choosing the optimal portfolio consistent with the bank's preferences according to different estimates of return and risk, thus leading to the proper management of loans.

Subjects

BANK loans; AGRICULTURAL industries; ROAD maps; GENETIC algorithms; BANKING industry

Publication

Plant Archives (09725210), 2021, Vol 21, Issue 1, p500

ISSN

0972-5210

Publication type

Academic Journal

DOI

10.51470/PLANTARCHIVES.2021.v21.no1.070