Cooperative Customer Loan Eligibility Assessment System Using The Weighted Product (WP) Method

Abstract

The loan eligibility assessment model is an important aspect in cooperative financial management to ensure that loans are given to customers who truly meet the requirements and are able to fulfill repayment obligations. This research aims to develop a decision support model using the Weighted Product (WP) method in assessing the suitability of cooperative customers. The WP method was chosen because of its ability to integrate various criteria with certain weights, thereby enabling a more objective, transparent and structured assessment process. The criteria used in this research include length of cooperative membership, compliance with paying deposits, loan payment records, savings history, total monthly income, ratio of income to installments, and value of collateral for loans. Alternative customer data is analyzed using the WP method to produce a final score that represents the eligibility level of each customer. The research results show that this model is effective in helping cooperatives identify customers who are worthy of receiving loans based on a combination of predetermined criteria and weights. Implementing the WP method is also able to minimize the risk of bad credit by prioritizing customers with a low risk profile. Thus, it is hoped that this model can become a reliable tool in supporting decision making in cooperatives, as well as increasing efficiency and accuracy in the loan granting process.