Credit Risk Rating of the Bank's Customers by Data Envelopment Analysis: Case Study the Branches of Keshavarzi Bank

Regarding the nature of its activities, accompany with higher profitability, banks encounter large amount of risk. Among the variety of risk, credit risk is very important so it is inevitable that bank activities will accompany with risks. As an enterprise, having accurate information about ability of borrowers in paying back of their loans is the most important function and vital task in a bank. In this regard this research calculates the efficiency of 75 companies which have borrowed from BANK- E- Keshavarzi in 1380 by using Data Envelopment Analysis and it ranks them based on this procedure. It concludes, 15 companies stand on the border of efficiency. Being average technical efficiency about 78%, it shows that the mentioned companies have used the inputs of production about22% beyond their needs, so their activities have low profitability. According to this result, BANK- E- Keshavarzi could rank his companies in regard to different levels of risk.