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CONTROL SYSTEM I. CLIENT SELECTION Must establish a clear definition of target client for each type of loan products before promoting / marketing the product. The Group lending schemes are preferred in rural barangays, while other loan or individual lending may be implemented in urban areas or centers of trade and commerce and offices in a particular town or city. STRATEGY: a. Sharing of Credit Information Must verify through a formal letter, the credit history of all new applicants from other banks. b. Must share accurate and factual credit information of a client when asked to do so by other bank. The Credit history inquiry from other banks should be answered within 2-3 working days from the time the request is received. a. b. c. d. POLICY: The transferring client must be paid in full and has been cleared from all loan obligation from other bank as evidenced by the bank to bank report. The borrower shall undergo the process undergone by new borrower and shall be limited to the maximum amount of the 1st loan cycle. Must not directly/deliberately entice / bribe / persuade active client. Should avoid offering individual loans to members of the group lending programs.

II. APPLICATION The applicant must be required to fill up the application form. STRATEGY: a. The applicant must be interviewed first by the manager/loan officer, based on the information that he/she divulged in the application form to facilitate the checking process and determine what particular loan the bank could offer to the prospective borrower to meet his/her financial needs. b. The applicant should fill up the blanks properly and legibly and accompanied . by pertinent documents and collateral papers offered as security for the loan if necessary. c. The applicant should draw/prepare the sketch map of their residence including the business address if any.

POLICY & PROCEDURE: a. New applicants sincerity to transact business with the bank must be measured in one way or another. This is the reason why we have to require applicants to pay for an Processing Fee. b. New applicants are required to pay for the Inspection Fee following the schedule of charges. (this could cover the appraisal fee). c. Re-loans with an increase of amount applied will be required to pay the inspection fee in as much as the management require the re-evaluation of the latters collateral and/or required to put additional collateral. d. Re-loan of the same amount are not required to pay an inspection fee if there is a need for the management to re-evaluate the established security. III. CIBI AND CASH FLOW ANALYSIS These are the same forms, the first page is the CIBI borrower information data form and at the back is the Cash Flow Analysis. This is to be conducted by the Account Officer and he is expected to submit a thorough credit investigation and must undertake a character checking. Cash Flow is to determine the borrowers repayment capacity. STRATEGY: (CIBI) a. The CI is accomplished mainly by the bank credit Investigation and field work. b. The background investigation should be done on the field to get all information especially their character test. POLICY: a. New applicant should undergo the CIBI information and must be done thoroughly and independently. b. It should be conducted by the account officer. c. The information gathered must be accurate and objective. STRATEGY: (Cash Flow Analysis) It is an assessment of how much a person can manage to pay debts over a particular period of time. It is affected by fluctuations in market prices of raw materials, inventory, business income, family income and expenses. a. Conduct a client interview to determine the data to be plotted on the CF Analysis form. b. Plot the data obtained in the respective period of occurrence, its either daily, c. weekly or monthly. d. Perform the required mathematical operations per column.

e. The negative cash flow on a daily and weekly periods are converted into their monthly equivalent. Positive weekly shall also be converted. Disregard positive daily cash flows. POLICY: a. The cash flow analysis must be conducted by the account officer. b. The result of the cash flow analysis must be reviewed by the Supervisor. c. Do not include farming income in the computation as it overstates repayment capacity. d. Verify the data gathered from the clients. Keep in mind that a few minutes spent in cash flow is better than spending so much time and effort in rehabilitating past due borrowers due to non-conduct. IV. PROVISIONAL RECEIPT (PR) The Provisional Receipt of the account officer is issued only once, the PR is served as temporary receipt by the borrower during collection outside the bank/field. STRATEGY: a. The Provisional Receipt must be counter checked by the supervisor at the end of the day. b. Provisional Receipt duplicate/triplicate must be balanced to their corresponding loan account number subsidiary, this must be checked by the supervisor and conduct a random visit to said account. POLICY: a. Provisional Receipt of the AOs should be submitted to the supervisor every end of the day. b. The supervisor is responsible of all PRs to return and withdraw from the PR Custodian. c. The PR should be issued with an Original Receipt within 24 hours from the issuance.

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