What Drives Lending Inquisitors’ Judgement & Decision-Making: Behavioural Factors Analysis through Kruskal–Wallis & Fuzzy AHP
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Sandeepa Kaur
Abstract
The present study investigates what drives Lending inquisitors’ judgement & decision-making behaviour that influences credit risk assessment in Indian banks. This research investigates three aspects: risk attitude & information acquisition behaviour, the effect of experience on lending, and desirable attributes of lending inquisitors. For the first area, Kruskal–Wallis non-parametric test is applied, for second area correlation and Cramer’s V is applied on fictitious case analysis and for third aspect 27 attributes of inquisitors through unstructured personal interviews are then analysed by applying Kruskal Wallis Test, Factor analysis and Fuzzy analytic hierarchy process (FAHP). Fuzzy AHP technique was applied to understand the key personal attributes and sub-attributes, which play a major role in Lending inquisitors’ judgement & decision-making behaviour. The risk attitude and information acquisition provided no substantial relationship between the two. Whereas, in the second area, which is assessing the impact of experience on decision-making behaviour, the result shows that the senior and junior credit inquisitors are cautious in acquiring the information as compared to outsourced credit inquisitors.
Annexure 1: Sample of banks
Out of the examination populace referenced over, the sample size for the investigation was two hundred seventy-five (275) respondents from 18 chosen banks. Since there are a limited number of workers liable for credit appraisal and risk management in the majority of the banking organisations, this sample size was viewed as adequate. The following is the quantity of respondents from sample banking organisation that reacted to the survey questionnaire:
(A) Public sector banks (125 respondents): -
State Bank of India −15
Dena Bank – 20
Oriental Bank of Commerce – 15
Bank of Baroda – 15
Canara Bank – 20
Union Bank of India – 15
Punjab National Bank – 10
Indian Bank – 15
(B) Private sector banks (100 respondents): -
Axis Bank - 15
ICICI Bank - 15
HDFC Bank - 15
Yes Bank - 15
Kotak Mahindra Bank - 15
Federal Bank – 25
(C) Foreign banks (50 respondents): -
Citi Bank – 20
Standard Chartered Bank – 10
Barclays Bank – 10
HSBC – 10
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