INTEGRATION OF SUSTAINABILITY CRITERIA IN CREDIT RISK FORECASTING

Authors

  • S. N. Yahaya Faculty of Technology Management and Technopreneurship, Universiti Teknikal Malaysia Melaka
  • M. H. Bakar Graduate School of Business Administration, Kobe University
  • N. Mansor Faculty of Technology Management and Technopreneurship, Universiti Teknikal Malaysia Melaka
  • N. Aziz Faculty of Technology Management and Technopreneurship, Universiti Teknikal Malaysia Melaka

DOI:

https://doi.org/10.4314/jfas.v10i2s.87

Keywords:

credit risk model, risk management, sustainability criteria

Abstract

Credit risk forecasting is very crucial and widely studied as it provides a significant impact in forecasting the company’s performance. It needs to be evaluated from various aspects to ensure the validity and accuracy of the process. The existing model considered solely on financial factors is less adequate, therefore, this paper attempts to integrate the sustainability factors in order to improve and strengthen the forecasting ability of credit risk performance since the role of suitability criteria is drawing more attention by financial provider. This paper attempts to study the correlation between the three sustainability criteria and financial performance by testing the relationship using multiple regression model. The result strengthens the forecasting process and add more remarkable finding to credit risk management model as a whole.

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Published

2018-05-31

Issue

Section

Research Articles