A Comparative Analysis of Conventional Creditworthiness Assessment Methods and AI-Based Assessment Methods

This research paper aims to investigate and compare conventional creditworthiness assessment methods with emerging AI-based approaches in the context of lending and financial decision-making. The conventional methods typically rely on historical financial data, credit scores, and collateral evaluation, while AI-based methods leverage machine learning algorithms to analyze alternative data sources and behavioral patterns. The paper will explore the advantages and limitations of each approach, considering factors such as accuracy, transparency, bias, scalability, and regulatory compliance. Additionally, the study will discuss the ethical implications and potential societal impacts of transitioning towards AI-based creditworthiness assessment methods. Through a comprehensive analysis, this research aims to provide insights into the evolution of credit risk assessment practices and inform stakeholders about the implications of adopting AI in lending decisions.

Authors

Publication Details

Journal
MUDRA Journal of Finance and Accounting
Published
2025-05-03
DOI
https://doi.org/10.17492/jpi.mudra.v12i1.1212510
Primary Topic
Financial Distress and Bankruptcy Prediction
Type
article
Field-Weighted Citation Impact
0.00
Controls
|||
ALL TIME
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
article

A Comparative Analysis of Conventional Creditworthiness Assessment Methods and AI-Based Assessment Methods

Shivam Shukla, Amit Kumar Mishra, R. K. Singh
MUDRA Journal of Finance and Accounting
Financial Distress and Bankruptcy Prediction
article

A Comparative Analysis of Conventional Creditworthiness Assessment Methods and AI-Based Assessment Methods

Shivam Shukla, Amit Kumar Mishra, R. K. Singh
article en

Abstract

This research paper aims to investigate and compare conventional creditworthiness assessment methods with emerging AI-based approaches in the context of lending and financial decision-making. The conventional methods typically rely on historical financial data, credit scores, and collateral evaluation, while AI-based methods leverage machine learning algorithms to analyze alternative data sources and behavioral patterns. The paper will explore the advantages and limitations of each approach, considering factors such as accuracy, transparency, bias, scalability, and regulatory compliance. Additionally, the study will discuss the ethical implications and potential societal impacts of transitioning towards AI-based creditworthiness assessment methods. Through a comprehensive analysis, this research aims to provide insights into the evolution of credit risk assessment practices and inform stakeholders about the implications of adopting AI in lending decisions.

MUDRA Journal of Finance and AccountingVol. 12(1)
Openalex Percentile: Top 87%
Financial Distress and Bankruptcy Prediction
AI Navigator

Ask Laika to Summarize, Analyze, and Connect papers live on the map.

Summarize Papers & Methodologies

Extract key findings, datasets, and comparative methods across publications.

Benchmark Rankings & Visual Analytics

Rank top research institutions, authors, funders, topics, and journals by Field-Weighted Citation Impact (FWCI) and paper volume with instant charts.

Connect Distant Disciplines

Bridge topological clusters on the map to find hidden collaborative intersections.