Effect of Artificial Intelligence on Credit Risk Management of Digital Loan: The Case of Cooperative Bank of Oromia S.C.
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Date
2024-06-13
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A.A.U
Abstract
Artificial Intelligence is a computer integrated and developed system that accomplish jobs that previously used human intelligence which includes identify models, making decision and speech recognizing. However, empirical studies aimed at addressing the effect of Artificial Intelligence on credit risk management of digital loan is not well studied. Specifically there is no any researches conducted either in Ethiopian banking industry or Coop bank till this study is proposed to do. As a result, the major objective of this research is to assess the effect of Artificial Intelligence on credit risk management of digital loan. Artificial Intelligence Applications on digital lending are independent variables (Artificial Intelligence Credit scoring, lending decision and personalized loan offering), while the dependent variable is Credit risk management. The study targeted a population of Coop bank employees found in head office and branches. The study was employed close ended structured questionnaires that was prepared by the five points Likert scale form. The explanatory research design was employed in the study to ascertain the association the cause and effect between independent and dependent variables descriptive analysis was employed to analyze Indicators of central tendencies such as mean, standard deviation, frequency, and percentage. A quantitative research approach was used in this study. This study was used primary data gathered by a researcher using a questionnaire. The multiple regression results indicated that all of the three Independent variables have positive significant relationship with dependent variable. Finally, depending on the finding from the study, a researcher was recommended the studied bank and the future studies to expand the topic and related measurements.
Key words: Artificial Intelligence, Digital Lending, Credit risk management, credit scoring, lending decisions and personalized loan