{"title":"Risk Classification of SMEs by Early Warning Model Based on Data Mining","authors":"Nermin Ozgulbas, Ali Serhan Koyuncugil","volume":70,"journal":"International Journal of Economics and Management Engineering","pagesStart":2649,"pagesEnd":2661,"ISSN":"1307-6892","URL":"https:\/\/publications.waset.org\/pdf\/14725","abstract":"<p>One of the biggest problems of SMEs is their tendencies to financial distress because of insufficient finance background. In this study, an Early Warning System (EWS) model based on data mining for financial risk detection is presented. CHAID algorithm has been used for development of the EWS. Developed EWS can be served like a tailor made financial advisor in decision making process of the firms with its automated nature to the ones who have inadequate financial background. Besides, an application of the model implemented which covered 7,853 SMEs based on Turkish Central Bank (TCB) 2007 data. 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