Importance of Credit Allocation Pre-Evaluation Criteria in The Revision of Bank Credit Limits of Small and Medium-Sized Hotel Enterprises: AHP Analysis

Abstract

The process from the start of credit transactions to the creation of credit limits is very important for credit allocation. In the credit allocation process, the customer needs to be well researched and their financial data examined in depth. For this purpose, pre-examination with evaluation criteria is carried out by credit allocation authorities in banks. The aim of this study is to explain what the criteria that banks consider during the allocation phase when re-creating credit limits in the revision of the credit limits of small and medium-sized hotel enterprises and to determine the importance of these criteria. In the study, evaluation was carried out with four basic criteria such as customer pre-control, financial structure, intelligence, corporate identity and administrative structure and sub-criteria of these basic criteria. In the selection of the criteria, the opinions and literature studies of the officials who worked and worked for a long time in the loan allocation department were used. Thanks to the allocation pre-evaluation criteria used during the loan allocation phase, banks meet the credit limit with appropriate collateral conditions as much as the companies need. Another important of the evaluation criteria in the allocation is that it provides enlightening information to the authorities in the bank's credit allocation unit about how much credit risk should be financed. In this context, the Analytical Hierarchy Process (AHP) method was used to determine the severity levels of the credit allocation pre-evaluation criteria. As a result of the analysis, the order of importance of the main criteria for pre-evaluation of credit allocation in the revision of loans of small and medium-sized hotel enterprises; financial structure, customer pre-check, intelligence, corporate identity and managerial structure. The results of the study contain important information about which criteria banks prioritize when creating credit limits for their customers.