Analytic hierarchy process method in evaluation of credit demands and a reasearch on its applicability

In this study, by using financial ratios and considering non-financial criterion together, a model that aims to assess ratings of four textile industry firms? credibility is developed. The Analytic Hierarchy Process Method is used to construct the model. The Analytic Hierarchy Process (AHP) is one of the multi criteria decision making method that constructs a multi-level decision hierarchy and obtains relative weights of components of the hierarchy by making pairwise comparisons and gets an overall score by combining these weights. The Analytic Hierarchy Process method is easy to use and capable to keep tract of decision made in reaching the overall score by combining different types of criteria. In the application of Analytic Hierarchy Process, criteria and subcriteria are classified and placed in hierarchy, then an overall credibility score is calculated. The developed model is ran for each firm and for every firm a single credit rating is obtained. And then the model is used to compare the firms with the other firms in the same sector and according to example firms? credit ratings, credit decision is made. At the end, applicability of this method is also discussed. This study aims to performs the credit evaluation process more objective and mathematically, to shortens the credit evaluation time and to provides uniformity with considering both qualitative and quantitative criteria in credit decisions. Keywords : Analytic Hierarchy Process, Multi Criteria Decision Making, Credibility, Credit Evaluation, Credit Rating.