Generative Artificial Intelligence In Trade Credit Risk Assessment
Keywords:
Generative AI, Python Programing, Trade Credit Risk, Review
Abstract
This paper reviews 25 articles and also demonstrates how the AI can be used to validate the credit risk of the Different Trading blocks. Generative AI and Python programs have been used to create the demonstrative output. The results are phenomenal. Credit risk assessment of a trade consignment consists of the Country Risk, Currency Risk and the consignment value risk. This can be estimated quickly using the generative AI. Frist this paper attempts to review the literature and arrive at the model for the prediction of the risks using generative AI and ranking them. The inference from this paper is that the functional context would be the backbone of a prompt engineering too.
References
1. Lezgovko, A., & Jakovlev, A. The evaluation of trade credit insurance in the Lithuanian business market as a credit risk management tool. Economics and culture, 14(1), 5-20. 2017
2. Pourdarab, S., Nadali, A., & Nosratabadi, H. E. A hybrid method for credit risk assessment of bank customers. International Journal of Trade, Economics and Finance, 2(2), 125-131. 2011
3. Ferreira, F. A., Santos, S. P., & Dias, V. M. An AHP-based approach to credit risk evaluation of mortgage loans. International Journal of Strategic Property Management, 18(1), 38-55. 2014
4. Wang, W., Lesner, C., Ran, A., Rukonic, M., Xue, J., & Shiu, E. Using small business banking data for explainable credit risk scoring. In Proceedings of the AAAI Conference on Artificial Intelligence Vol. 34, No. 08, pp. 13396-13401 2020, April
5. Pridotkienė, J., Snieška, V., & Snieškienė, G. The Principles of Exporter-Provided Trade Credit Risk Model. Engineering Economics, 47(2), 7-14. 2006
6. Sim, J., & Prabhu, V. V. (2022). The impact of credit risk on cash-bullwhip in the supply chain. The Engineering Economist, 67(4), 266-287.
7. Billett, M. T., Freeman, K., & Gao, J. (2022). Access to Debt and the Provision of Trade Credit. Available at SSRN 3966713.
8. Zurada, J. (2007). Rule Induction Methods for Credit Scoring. Review of Business Information Systems (RBIS), 11(2), 11-22.
9. Ferreira, F. A., & Santos, S. P. (2016). Comparing trade-off adjustments in credit risk analysis of mortgage loans using AHP, Delphi and MACBETH. International Journal of Strategic Property Management, 20(1), 44-63.
10. Anderson, R. (2007). Credit risk assessment: Enterprise-credit frameworks. Credit Research Center, Univ. of Edinburgh, Edinburgh, UK.
11. Zamore, S., Ohene Djan, K., Alon, I., & Hobdari, B. (2018). Credit risk research: Review and agenda. Emerging Markets Finance and Trade, 54(4), 811-835.
12. Summers, B., & Wilson, N. (1999). An empirical investigation of trade credit use: a note. A Report from the Credit Management Research Centre of Leeds University Business School.
13. Zhu, Y., Zhou, L., Xie, C., Wang, G. J., & Nguyen, T. V. (2019). Forecasting SMEs' credit risk in supply chain finance with an enhanced hybrid ensemble machine learning approach. International Journal of Production Economics, 211, 22-33.
14. Hunt, R. A., Hayward, M. L., Song, Y., Townsend, D. M., & Stallkamp, M. (2023). Getting a Foot in the Door: Trade Credit Strategies and the Pursuit of Entrepreneurial Internationalisation. International Small Business Journal, 41(1), 55-87.
15. Xie, X., Zhang, F., Liu, L., Yang, Y., & Hu, X. (2023). Assessment of associated credit risk in the supply chain based on trade credit risk contagion. PloS one, 18(2), e0281616.
16. Kanapickiene, R., & Spicas, R. (2019). Credit risk assessment model for small and micro-enterprises: The case of Lithuania. Risks, 7(2), 67.
17. AghaeiRad, A., Chen, N., & Ribeiro, B. (2017). Improve credit scoring using the transfer of learned knowledge from a self-organizing map. Neural Computing and Applications, 28, 1329-1342.
18. Allen, L., DeLong, G., & Saunders, A. (2004). Issues in the credit risk modelling of retail markets. Journal of Banking & Finance, 28(4), 727-752.
19. Terradez, M., Kizys, R., Juan, A. A., Debon, A. M., & Sawik, B. (2015). Risk scoring models for trade credit in small and medium enterprises. In Theory and Practice of Risk Assessment: ICRA 5, Tomar, Portugal, 2013 (pp. 349-360). Springer International Publishing.
20. Costello, A. M. (2019). The value of collateral in trade finance. Journal of Financial Economics, 134(1), 70-90.
21. Freeman, Kayla, The Lender's Lender: Trade Credit and the Monitoring Role of Banks (November 22, 2022). Available at SSRN: https://ssrn.com/abstract=3235838 or http://dx.doi.org/10.2139/ssrn.3235838
22. Kanapickiene, R., & Spicas, R. (2019). Credit risk assessment model for small and micro-enterprises: The case of Lithuania. Risks, 7(2), 67.
2. Pourdarab, S., Nadali, A., & Nosratabadi, H. E. A hybrid method for credit risk assessment of bank customers. International Journal of Trade, Economics and Finance, 2(2), 125-131. 2011
3. Ferreira, F. A., Santos, S. P., & Dias, V. M. An AHP-based approach to credit risk evaluation of mortgage loans. International Journal of Strategic Property Management, 18(1), 38-55. 2014
4. Wang, W., Lesner, C., Ran, A., Rukonic, M., Xue, J., & Shiu, E. Using small business banking data for explainable credit risk scoring. In Proceedings of the AAAI Conference on Artificial Intelligence Vol. 34, No. 08, pp. 13396-13401 2020, April
5. Pridotkienė, J., Snieška, V., & Snieškienė, G. The Principles of Exporter-Provided Trade Credit Risk Model. Engineering Economics, 47(2), 7-14. 2006
6. Sim, J., & Prabhu, V. V. (2022). The impact of credit risk on cash-bullwhip in the supply chain. The Engineering Economist, 67(4), 266-287.
7. Billett, M. T., Freeman, K., & Gao, J. (2022). Access to Debt and the Provision of Trade Credit. Available at SSRN 3966713.
8. Zurada, J. (2007). Rule Induction Methods for Credit Scoring. Review of Business Information Systems (RBIS), 11(2), 11-22.
9. Ferreira, F. A., & Santos, S. P. (2016). Comparing trade-off adjustments in credit risk analysis of mortgage loans using AHP, Delphi and MACBETH. International Journal of Strategic Property Management, 20(1), 44-63.
10. Anderson, R. (2007). Credit risk assessment: Enterprise-credit frameworks. Credit Research Center, Univ. of Edinburgh, Edinburgh, UK.
11. Zamore, S., Ohene Djan, K., Alon, I., & Hobdari, B. (2018). Credit risk research: Review and agenda. Emerging Markets Finance and Trade, 54(4), 811-835.
12. Summers, B., & Wilson, N. (1999). An empirical investigation of trade credit use: a note. A Report from the Credit Management Research Centre of Leeds University Business School.
13. Zhu, Y., Zhou, L., Xie, C., Wang, G. J., & Nguyen, T. V. (2019). Forecasting SMEs' credit risk in supply chain finance with an enhanced hybrid ensemble machine learning approach. International Journal of Production Economics, 211, 22-33.
14. Hunt, R. A., Hayward, M. L., Song, Y., Townsend, D. M., & Stallkamp, M. (2023). Getting a Foot in the Door: Trade Credit Strategies and the Pursuit of Entrepreneurial Internationalisation. International Small Business Journal, 41(1), 55-87.
15. Xie, X., Zhang, F., Liu, L., Yang, Y., & Hu, X. (2023). Assessment of associated credit risk in the supply chain based on trade credit risk contagion. PloS one, 18(2), e0281616.
16. Kanapickiene, R., & Spicas, R. (2019). Credit risk assessment model for small and micro-enterprises: The case of Lithuania. Risks, 7(2), 67.
17. AghaeiRad, A., Chen, N., & Ribeiro, B. (2017). Improve credit scoring using the transfer of learned knowledge from a self-organizing map. Neural Computing and Applications, 28, 1329-1342.
18. Allen, L., DeLong, G., & Saunders, A. (2004). Issues in the credit risk modelling of retail markets. Journal of Banking & Finance, 28(4), 727-752.
19. Terradez, M., Kizys, R., Juan, A. A., Debon, A. M., & Sawik, B. (2015). Risk scoring models for trade credit in small and medium enterprises. In Theory and Practice of Risk Assessment: ICRA 5, Tomar, Portugal, 2013 (pp. 349-360). Springer International Publishing.
20. Costello, A. M. (2019). The value of collateral in trade finance. Journal of Financial Economics, 134(1), 70-90.
21. Freeman, Kayla, The Lender's Lender: Trade Credit and the Monitoring Role of Banks (November 22, 2022). Available at SSRN: https://ssrn.com/abstract=3235838 or http://dx.doi.org/10.2139/ssrn.3235838
22. Kanapickiene, R., & Spicas, R. (2019). Credit risk assessment model for small and micro-enterprises: The case of Lithuania. Risks, 7(2), 67.
Published
2024-05-30
How to Cite
Dr Tawheed Nabi, & Dr P James Daniel Paul. (2024). Generative Artificial Intelligence In Trade Credit Risk Assessment. Revista Electronica De Veterinaria, 25(1), 618-624. https://doi.org/10.53555/redvet.v25i1.619
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Section
Articles
