Decision Tree_Loan Delinquent_Problem Statement.pdf
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This document outlines the problem statement and objectives of a study to analyze loan data and identify borrower characteristics that contribute to delinquency. The objectives are to understand the major factors leading borrowers to become delinquent, as delinquency increases risk of default. The main objective is to minimize this risk by building a decision tree model using CART technique to identify risk and non-risk attributes of borrowers that result in delinquency. The tool to be used is R Studio.
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Decision Tree_Loan Delinquent_Problem Statement.pdf
- 2. Problem Statement & Objectives of Study • Based on the given loan data can we understand the major factors or characteristics of a borrower which makes them to get into delinquent stage. • Delinquency is a major metric in assessing risk as more and more customers getting delinquent means the risk of customers that will default will also increase. • The main objective is to minimize the risk for which you need to built a decision tree model using CART technique that will identify various risk and non-risk attributes of borrower’s to get into delinquent stage. • Tool to be used - R Studio