Lesson 5 - CREDIT AND COLLECTION PROCEDURE

• Target Market Identification


  is a process where the lending unit identifies the client base and credit program facilities it will pursue.
• Account Origination/Prospecting


  refers to the introductory and exploratory discussions the account officers do in relation to credit initiation.
• Pre-Screening Process

  1. Receipt of Credit Application

  2. With initial credit information on which to base its credit decision, if credit decision has to be made without further credit investigation

  3. Information on which to further interview the applicant

  4. With some “leads” on which to start the credit investigation process
• Documents required for Individual Applicant

  • Latest Income Tax Return
  • Marriage Contract (if married)
  • Photograph
• Documents required for Single Proprietorship Applicant

  • Business Information Sheet
  • Certificate of Business Name Registration with the DTI
  • Income Tax Return
  • Audited Financial Statements
  • Statement of Assets and Liabilities
  • Photograph of principal/owner
• Documents required for Partnership/Corporation Applicant

  • Business Information Sheet
  • Copy of Registration with the SEC
  • Articles of Incorporation and By-Laws (for corporation)/Articles of Co-Partnership and Partner's Resolution (for partnership)
  • List of Officers and Directors certified by the Corporate Secretary
  • Bio-data/Personal Information of Officers and Directors
  • Alien Registration Certificate of foreign officers
  • Audited financial statements
  • Board Resolutions to borrow or enter into the requested facility
• Pre-Screening


  is done by taking a cursory review of the application whether this is accurately and completely filled up and determined thru preliminary interview whether or not the applicant is qualified.
• PRE-SVREENING

  is done by taking a cursory review of the application whether this is accurately and completely filled up and determined thru preliminary interview whether or not the applicant is qualified.
• interview


  is conducted to obtain, confirm and verify information about the applicant which is sufficiently reliable, acceptable, and complete to facilitate sound credit decisions.
• Account origination/Prospecting


  It is when the account officer introduces the products and services that may be relevant to the prospective client.
• Account Origination/Prospecting


  the account officer secures relevant information on his prospects including financial and related interests.
• Target Market Negotiation

  defined

  terms of acceptance

  staff competence
• Origin

  client request

  prospect discovery

  outside referral
• Evaluation

  purpose

  business

  management

  figures

  character

  capacity to pay

  collateral
• Negotiation

  tenor

  repayment

  covenants

  security

  other
• The first activity in the Credit Department as it starts actual operation of its functions is the credit application.
• As a matter of policy, no credit extension should be approved and released, unless the customer/client had at least filled up a credit application form.
• In order to guide the credit applicant, it would be good practice to give a listing of the company requirement upon his signifying his intention to apply for such a credit accommodation or loan.