Credit Guarantee Corporation: Accommodating an Expansion Strategy
(7 pages of text)
In September 2011, the chief risk officer of Credit Guarantee Corporation Malaysia Berhad (CGC) was mulling over a pressing problem. CGC was looking to expand its business in Malaysia from just giving guarantees to small and medium enterprises to also providing direct loans (direct-lending products). The change required a major overhaul in business strategy and an increase in eligibility criteria. Previously, most criteria were checked manually by CGC for each of its clients—a slow and unreliable process. Given the recent developments, how could CGC revise its business rules in order to accommodate its expansion strategy?
This case is suitable for graduate/MBA level courses in information systems, data mining, business intelligence, software project management, and corporate risk management. After completing the case, students should be able to do the following:
- Recognize the importance of the Basel II framework in the context of risk mitigation.
- Understand the step-by-step procedure for implementing the Basel II framework in a bank.
- Describe the utility of score models and decision trees in deriving business rules.
- Appreciate the utility and flexibility of business rules management system software in incorporating the Basel II framework and customizing eligibility criteria without the need of a programmer.
Finance and Insurance
Malaysia, Medium, 2011
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