Credits and credit analysis in banking sector

Abstract

The main activity of banks can be defined as providing funds to who needs funds by collecting deposits. Banks, which are a commercial enterprise, have to perform transactions called credit analysis in order to minimize the risk of nonpayment within the natural structure of the credit while selling credit and other financial products to their customers as a company that produces and sells any product. Banks provide the most accurate offer to the customers by analyzing the possible risks and positive aspects of their customers with the credit analysis method. In terms of banks, repayment of credits in terms of maturities means that their credit portfolios are healthy and their profitability is high. In order to ensure the continuity of commercial life of banks and contribute to the sustainable growth of the economies of the country, the credit transactions of the banking sector are important. It means that the contribution to the country’s economy by providing the financing needs of the right projects will be reflected positively to many macro-indicators such as unemployment and tax revenues, and also to ensure the return of the wheels in terms of the country’s economy. The economic importance of credits has been experienced by the whole world in the last global crisis that emerged on the basis of unpaid credits. Since the shock experienced by a financial actor causes crises in multiple markets at a time, the way in which banks manage the lending process is. © Peter Lang GmbH Internationaler Verlag der Wissenschaften Berlin 2019 All rights reserved.