DataSource- https://www.kaggle.com/datasets/gauravduttakiit/loan-defaulter
Problem Statement-
- Which type of customers should be targeted by the bamk who will be non-defaulters?
- What kind of interest rate bank can provide to these non-defaulter targeted customers?
- Make a thorough analysis and mention Recoomendations, Insights and Precautions
most of the customers have taken cash loan
customers who have taken cash loans are less likely to default
most of the loans have been taken by female
default rate for females are just ~7% which is safer and lesser than male
unacompanied people had tanke most of the loans and the default rate is ~8.5% which is still okay
the safest segments are working, commercial associates and pensioners
Higher education is the safest segment to give the loan with a default rate of less than 5%
Married people are safe to target, default rate is 8%
People having house/appartment are safe to give the loan with default rate of ~8%
Low-Skill Laboreres and drivers are highest defaulters
Accountants are less defaulters
Core staff, Managers and Laborers are safer to target with a default rate of <= 7.5 to 10%
Transport type 3 highest defaulter
Others, Business Entity Type 3, Self Employed are good to go with default rate around 10 %
>> most of the loans were given for the goods price ranging between 0 to 1 ml
>> most of the loans were given for the credit amount of 0 to 1 ml
>> most of the customers are paying annuity of 0 to 50 K
>> mostly the customers have income between 0 to 1 ml
>> AMT_CREDIT and AMT_GOODS_PRICE are linearly corelated, if the AMT_CREDIT increases the defaulters are decreasing
>> people having income less than or equals to 1 ml, are more like to take loans out of which who are taking loan of less than 1.5 million, coudl turn out to be defaulters. we can target income below 1
million and loan maount greater than 1.5 million
>> people having children 1 to less than 5 are safer to give the loan
>> People who can pay the annuity of 100K are more like to get the loan and that's upto less than 2ml (safer segment)
>> for the repairing purpose customers had applied mostly prev. and the same puspose has most number of cancelations
>> most of the app. which were prev. either canceled or refused 80-90% of them are repayer in the current data
>> offers which were unused prev. now have maximum number of defaulters despite of having high income band customers
>> having low income i.e. below 1 ml
>> working in Others, Business Entity Type 3, Self Employed org. type
>> working as Accountants, Core staff, Managers and Laborers
>> having house/appartment and are married and having children not more than 5
>> Highly educated
>> preferably female
>> unacompanied people can be safer - default rate is ~8.5%
>> the credit amount should not be more than 1 ml
>> annuity can be made of 50K (depending on the eligibility)
>> income bracket could be below 1 ml
>> 80-90% of the customer who were prev. canceled/refused, are repayers. Bank can do the analysis and can consider to give loan to these segments
>> org. Transport type 3 should be avoided
>> Low-Skill Laboreres and drivers should be avoided
>> offers prev. unused and high income customer should be avoided