Application of viable system model in diagnosing defects and problems of the credit supply chain network in the Iranian banking industry

Abstract

AbstractThe present study attempts to study the credit supply process in the Iranian banking industry by using the viable system model (VSM) to identify its vulnerabilities and improve the financing system. The method used in this study consists of three steps: (a) identification of system, (b) diagnosis of system and (c) control of information flow, communication channels and frequent errors. In this research, 37 credit experts from 17 different bank branches were interviewed about the process of granting facilities, and SPSS 23 was used to examine research objectives through the Delphi method. The results show that the structure of Iran's credit supply chain network suffers from such problems as deviation in the appropriate use of allocated credit resources, structural faults of the banking system and lack of administrative health, high bureaucracy, directed facilities, etc. In the end, some suggestions are provided for redesign and optimization of the credit supply network.