Delphi application in solicitation of qualitativerisk factors for estimation of a perceivedprobability of default: Case of Karafarin Bank

Unreliability of financial statements in iran has urged this country'sfinancial services industry management to manipulate practices by whichthey could gain reliable risk scores for borrowers. this research extractsthe most influential qualitative factors that would impact the default of abusiness relationship borrower. solicitation of the factors is done throughdelphi methodology. the mean weight of each factor is then calculatedfrom grades given to each factor by the experts.as a case study, lending relationships of a private bank,karafarinbank (kb), and hundred of its relationship borrowers, are examined andthe credit committee of the bank is asked to rate these companiesaccording to extracted attributes found by this research through delphimethod. the qualitative risk score of these companies are then derivedand it is shown how this score could be used for estimation of a perceiveddefault probability of customers