Transdisciplinary Credit Allocation Policy to Foster Regional Economic Development Through Financial Institutions

Abstract

Corporate philosophies of multiple financial institutions, including development banks, address regional economic development as their corporate driver. Regardless the latter, regional development financial institutions usual priority focuses primarily on individual application credit risk assessment, without a designed long term policy to impact strategic industries and its regional key economic objectives. With a transdisciplinary approach that involves a number of engineering (engineering economics, mathematical programming) and non engineering disciplines (finance, accounting, banking, policy making) that takes into account the full set of stakeholders (credit applicants, financial institutions, society at large, governments, among others), the contribution of this work impact the future of engineering practice by providing a framework (a method that includes a ready to use decision support tool) to design a transdisciplinary credit allocation policy that financial institutions could rely on to have a targeted aim significant impact in the strategic economic transformation of focused regions. A numerical illustration is provided to highlight the specifics of this transdisciplinary policy for the benefit of practitioners and society.