A Risk Assessment Model for Financing Housing Projects.
Student Name: Nagaraj B. Kulkarni
Two alternative logistic regression models were developed and compared for
Risks (classified as Risky and Safe) associated with housing projects financed
by HDFC. In the first model, various independent variables, suggested in the
literature, were first used to model the ratings of Marketability, Management
Quality, Technical Capability, Financial Strength and Project Viability of a
sample of 28 projects, which in turn were used to model the final riskiness of
the projects. That is a two-tier approach was taken in the first model. The
second model had an additional intermediate tier of Company Rating (modeled
using Management Quality, Technical Capability, and Financial Strength) and
Project Rating (modeled using Marketability and Project Viability) for modeling
the final riskiness of the projects. The first model was found to be superior
than the second, which was then packaged as a software with GUI for aiding the
decision making process of whether to finance a given project or not, by
determining its risk.