Building Default Predicting Model on Firm's Short-term Loan Data with Artificial Neural Network - Considering Qualitative Indexes and Misclassification Costs

To date, using model to predict whether firm's default is still a problem. It presents: a. most model using pairwise pattern; b. lack of qualitative indexes that affect firm's default; c. asymmetric between normal firm's misclassification costs and default firm's. So, introducing qualitative indexes, using all samples and considering misclassification costs, this paper builds an artificial neural network model on short-term-loan data. Though training, validating and testing, it's performance is good.