Over the past few years, the financial sector have dedicated numerous resources to developing internal models to better quantify their financial risks and attain economic capital. These endeavors have been supported and recognized by bank regulators. Over time, banks have extended these efforts into the field of giving out loans to qualified customers. The loans are given out based on certain conditions like collateral and other factors, these factors may include checking if the customer is loan worthy, or through customers’ salary structures. These strict conditions must be clearly met by the customer seeking loan offer from the bank or they won’t be qualified for the loan they are requesting for. In this research, a computerized loan management system for rejecting or approving loan request using credit risk and evaluation models is to be designed, to solve the enormous challenges financial institutions face in giving out loans. The concept of giving out loans by banks was well understood and the pros and cons were ascertained, this helped in building the system to meet credit risk and evaluation models. The computerized system will provide less risk for the banks when reviewing customers loan request, the system will ascertain if the customer is loan worthy or not automatically. The newly developed system is automated, effective, comprehensive, interactive, and gives the financial institution less credit risk.
