Socio-Spatial Studies

Socio-Spatial Studies

Artificial intelligence in credit risk assessment

Document Type : Original Article

Authors
Simin Habib Zadeh Khiyaban 1
Shoaib Sabbar 2
1 BA in Public Administration, Department of Public Administration, Faculty of Accounting and Management, Allameh Tabataba’i University, Tehran, Iran
2 MA Student in international commercial Law, Faculty of Law, Azad University, Tehran, Iran
10.22034/soc.2022.230178
Abstract
This study presents a structured literature review on the application of AI in credit risk assessment, synthesizing empirical and conceptual research published between 2016 and 2022. It critically examines a range of AI models, including artificial neural networks (ANN), support vector machines (SVM), fuzzy logic systems, and hybrid architectures, with an emphasis on their predictive accuracy, robustness, and operational applicability. The review highlights that AI-based models consistently outperform traditional statistical techniques in handling nonlinear patterns, imbalanced datasets, and complex borrower profiles. Furthermore, AI enhances the inclusivity of credit evaluation by integrating alternative data sources and adapting to dynamic financial environments. However, the study also identifies ongoing challenges related to model interpretability, fairness, and regulatory compliance. By evaluating model performance metrics and methodological innovations across multiple contexts—including emerging markets, peer-to-peer platforms, and digital banking—the study offers a nuanced understanding of AI's strengths and limitations. The paper concludes with a call for balanced integration of explainable AI tools and ethical governance to ensure responsible deployment in financial institutions.
Keywords
credit risk assessment
artificial intelligence
machine learning
explainable AI
model interpretability
financial technology
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Socio-Spatial Studies
Volume 6, Issue 2
Spring 2022
Pages 1-14