| dc.description.abstract | Credit card market is well-developed during these 30 years in Taiwan. However, credit card is not only the paying tool, but a kind of non-asset backed loan which would make the banks suffer from great credit risk. Also, according to the research from Taiwan Ratings at end of 2003, loss given default from credit card usually will not appear until two years later, meaning that except telling good from bad applicants, banks should put emphasis on how to deal with the delinquent payment, too. The contribution of this research is to find out how the card granting mechanism affects cardholders’ default as well as what kind of factors would affect the monthly payment transitions. Dividing the thesis from two parts: (1)Stratified random sampling 6,000 rejected and 24,000 approved applicants including 23,398 good and 602 bad cardholders. Based on Jacobson-Roszbach(2003),we use Bivariate Probit Model to solve the sample selection bias problem and discuss the factors both influence the granting mechanism and cardholders’ default; (2)Integrating the concept of Smith-Lawrence(1996) and Lin-Yang(2000), we sampled monthly data for 30,000 cardholders, who open their credit card during 2001,from July 2002 to February 2004 to have a research on the issue of monthly payment transitions by Multinomial Logit Regression and Markov Chain.
The main results of this research as following described: (1)Two variables, education and job position ,have opposite coefficient in the loan granting and default equations. That means the bank was not minimizing credit risk, but willing to increase the revenue more; (2)Loan size and the class of credit card both have no significant influence on default risk showing that the bank wouldn’t grant bigger loans because they are riskier which is the same with Jacobson-Roszbach(2003)’s result; (3)Around 90% of slightly delinquent payment loans will transit to normal payment ones, but the cardholders using the involving interests to avoid default would greatly influence the recovery rate. The bank should prevent these loans from getting worse instead of collecting the loans when they have already been delinquent seriously; (4) As we mention cardholders’ living area, no one would tend to use the involving interests to pay the monthly bill but the ones living in south of Taiwan, so it ‘s worthy to focus on this kind of cardholders to expand the earnings; (5) Gold cardholders are more likely slightly delinquent, however, the recovery rate is higher. Moreover, although the income of involving interests is mainly from general cardholders, the probability of remaining staying in default conditions is also greater and that would cause the lower recovery rate for the bank. | en_US |