Defaulting Banking Loans: Small Business Investigation

Logistic regression models are perfect for developing solutions that require a binary decision. Should I lend this individual money? Yes or no?

In this study, our analysts provided statistical insight into the financial world. Thousands of loans are requested by small businesses every week in America. The attributes of the small businesses and the loans they request can provide a relative probability of success or failure to pay back the bank.

Glat analysts were successful in creating a model that will predict historical small business loans that have defaulted. 90% of historical loans were predicted correctly. This model was provided to the client with the intention to screen new small businesses during the loan application process.