ANALYSIS OF CUSTOMER PROFILE CHARASTERISTIC WITH CREDIT QUALITY USING THE CLUSTERING METHOD FOR RISK MITIGATION AND SMALL MEDIUM ENTERPRISE CREDIT PORTOFOLIO EXPANSION PLANNING

Abstract

in managing the Small Medium Enterprise credit portfolio. The strategy taken by a bank must be adapted to the general characteristics of the target debtors for business expansion and risk mitigation so that business expansion and risk mitigation efforts can be carried out effectively for certain groups. Based on these problems, the purpose of this research is to identify groups of debtors with similar characteristics based on debtor profile data and their credit quality, and to understand the differences in credit risk and opportunities for business expansion among these groups. The data used is the profile of the distribution of debtors from Bank ABC of 5088 debtors. The analysis technique used is K-Means and KMedoids with the evaluation criteria used are silhouette score, davies-bouldin index and computation time. Completion of the optimal number of groups is done by analyzing the WSS graph using the elbow method. Analysis of business expansion and risk reduction is carried out separately where business expansion analysis is carried out for debtors with a collectibility value of 1 and risk reduction analysis is carried out for debtors who have a collectibility value of 2 – 5. The results show that there are 5 groups in the business expansion analysis and 3 groups in risk mitigation analysis. The high value of the silhouette index and davies-bouldin index makes the grouping results have a strong structure. The KMedoids method is used in this analysis because it has better evaluation criteria than K-Means. Priority is also determined for each group formed so that it can be determined which group has the greatest opportunity to become target expansion and which group has the greatest risk that needs to be mitigated. In general, business sectors such as agriculture and plantations are experiencing a decline in economic activity in 2022, so it needs attention from the bank so that it does not disrupt the credit portfolio. To complement the results of this study, an analysis of external and internal business health needs to be carried out in more depth so that the big picture of credit problems at Bank ABC can be identified.