An Optimisation-Based Approach To The Disbursing Of Loan Portfolio

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Ernest Kwarteng
Samuel Yeboah Asuamah
Jacob Baffour Awuah

Abstract

 The paper aim at contributing to the body of knowledge that exists in the area of optimal loan portfolio by developing a model to allocate funds to prospective loan seekers in order to maximize profits using secondary data from Atweaban Rural Bank at Duayaw Nkwanta in the Tano North District of the Brong Ahafo Region, Ghana. The Simplex method was used for the algorithm and software called management scientist was also for the analysis. The results indicated that the funds allocated to the type of loans should be in increasing order of farm loan, suso loan, commercial loan, salary loan and funeral loan in order for the bank to maximize profit. Future research should increase the number of constraints and also vary the coefficients of the constraints to observe relationship between them. The study should be replicated in order banks to determine if the findings will be collaborated. 

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