Effect of Credit Zip Code Application onReducing Bank Credit Risks: Case Study on a Sample of Saudi Banks

Abstract

The current study is an attempt to identify the effect of Credit Zip Code application on reducing bank credit risks in Saudi Arabia and to getfunding operations and interestsmore secured. The study adopted the descriptive and analytical method. A questionnaire was utilized as a tool for data collection after verifying its validity and reliability; it was distributed to the staff of some Saudi banks, finance and sales departments, who were randomly selected.Number of 70 questionnaires were distributed, 66 were restored with 6 waste questionnaires and 60 questionnaires were able to be statistically analyzed which represents (85.7%) of the total questionnaires. Data were discharged & statistically analyzed by using "SPSS-18" software; questionnaire has two divisions, the first represented sample features and the second division has two domains represented questionnaire inquiries, study validity & reliability were examined by Cronbach's Alpha laboratories test, that ensured it as it indicated (.81 & .900) as validity & reliability rating. The results of the first domain of the study showed that the averagepercentage of agreementrated(98.8%), and the average response was (4.58), standard deviation was (0.52), and T-value was (11.80), significant at the level of (0.01). The results of the second domain of the study indicated that the average percentage of agreementrated (93.8%), and the average response was (4.43), with standard deviation of (0.63), and T-value was (12.1), significant at the level of (0.01). The study concluded that the total data and information provided by the application of credit Zip code system tobank customersreduce bank credit risks and bad loan, and to get banking funded operations more effective. The study recommended that Credit Zip Code system should be circulated to all Saudi banks to get more secured and free of bank financing risks and bad funding.