Wardah Hameed

Eligibility Criteria for Granting Loans: Conventional vs Islamic Banks: a Comparative Study Wardah Hameed

Loan granting is one of the primary functions of the banks. Everyone wants loan to meet their need but not all are eligible. This is because lenders use eligibility criteria to pin point those applicants who are most likely to default on their credit agreement. The key objective of this study is to identify the factors included in the eligibility criteria for granting loans and then to compare the eligibility criteria for granting loans of conventional banks with Islamic banks. A total of 50 sample was tested in this research. 25 samples were taken from Conventional banks and 25 from Islamic banks. Theoretical framework includes credit score, employment status, repayment history, financial stability, and collateral. Regression Analysis was used to check out the inter dependency among the relevant components and to test the hypothesis empirically. The results and findings of this research paper are fundamental to both researchers and the practitioners