Banking Risk Analysis in Tunisia: A Case Study of BTE Bank

The banking activity represents a strategic sector of sustainable economic development in Tunisia. Hence, Tunisian banks have the status of financial institutions that earn profits by providing financial services to customers by dealing with risks. Therefore, lending decisions for these establishments are strategic as they can avoid the risk of loan recourse. However, the assessment of borrowing sanctions in Tunisian banks is based on credit rating models. Consequently, it is important to assess the riskiness of the banking sector in Tunisia. Indeed, Tunisian banks have kept voluminous data concerning their clienteles which can be considered as critical knowledge assets which can be processed via underwritten credit management tools. This tools denote a recent development of statistical techniques and promising tools of data mining and data processing. The current study attempts to develop the rating model as a decision support system to credit approval evaluation at Tunisian banks based on applicant¡¯s characteristics; the proposed model is mainly based on quantitative and qualitative criteria can be used to help credit officers make better decisions when evaluating future loan applications. A real-world credit application of cases of both granted and rejected applications from BTE bank was employed to develop the rating model. The experimental outcomes showed that this approach area promising addition to the existing classification methods. It therefore requires a high responsibility and commitment of managers in the process of evaluation and decision-making to reduce both the risk of default and the risk of debt distress.