THE USE OF FUZZY LOGIC AND CONTROL SYSTEMS IN THE FINAL STEP OF CONSUMER LENDING DECISIONS

The rapid increase in bad loans caused banks to be more cautious and selective for minimizing their risks. However, although banks make the lending decision by using quantitative financial criteria, the final decision step is usually intuitive/judgemental when the offer does not meet the expectations of the customer. In this case, the success of the decision directly depends on the experience of the bank personnel or unit manager. Such an application may lead to decisions that do not comply with a specific standard/rule and result in default. One of the ways to eliminate these drawbacks is to standardize and automate the final decision phase within the framework of some subjective rules determined with common sense by the top management of the bank. Fuzzy logic allows quantitative analysis of subjective judgments and qualitative criteria. In this context, the aim of the study is to examine how fuzzy logic approaches can be used in the final step of lending decisions. A hypothetical lending decision was modeled and resolved using fuzzy linguistic qualifiers, fuzzy propositions, and fuzzy logic control systems. As a result, the fuzzy rule base of the control system that was visualized with MATLAB made it possible to examine the impact of different levels of subjective evaluation scores on the final decision. Also, decision fields and customer groups could be created with the pseudo-code surface images.