-who make the lending of money a

profitable business.
Chapter 3
COMMERCIAL ESTABLISHMENTS-continued
FINANCIAL INTERMEDIARIES-While lenders and
functioning of a credit economy(RETAILS
borrowers may be brought together through credit
STORE,DEPARTMENT STORE,SUPERMARKETS)
instruments and credit markets
PAWNSHOP
5 sources of credits
INSURANCE COMPANIES
FINANCIAL INSTITUTIONS-numerous just as
they are v a r i e d i n kinds and in scope SAVINGS AND LOAN ASSOCIATION
ranging from pawnshops to such credit
GOVERNMENT FINANCING INSTITUTIONS
institutions as investment houses.
INTERNATIONAL ORGANIZATIONS
-Financing Companies-defined under the
"Financing Company Act” FILIPINIZATION OF CREDIT
-Assignment of Credit-buying of installment
papers,

-Philippine Finance Companies

Chapter 5
INVESTMENT HOUSES- invariably termed as
investment banks 2 specific characteristic of credit instrument

-Investment Houses in the Philippines- 1) The presence of risk involved in that payment is
deferred to a later date
-Underwriting
2) The debtor- creditor relationship is stressed.
-Money Market
Classification of credit instrument
COMMERCIAL BANKING- "Obras Pias" during
the period of Spanish rule is not without As to Acceptability
significance.
As the form
-Commercial Banking Corporation
As to function
-Total Liabilities
As to Negotiability
-Line of Credit
COMMERCIAL CREDIT INSTRUMENTS
-Loan Agreements
Promises to Pay
SAVINGS AND MORTGAGE BANKING - in - Open book account
1882 of the first savings bank, the Monte de -Promissory note.
Piedad (originally called the Monte de Piedad -Collateral promissory note.
y Caja de Ahorros de Manila) -Commercial Letters of Credit.

-Loans and Investments Letters of Credit

RURAL BANKS- (the term "rural" meaning "open According to mode of transmission
country" si just another name for agricultural -circular
bank. -specially advised
According to duration of the
-Financial Assistance substitution of credit
-Rural Banks in Economic Development -Revocable
- irrevocable
Other Sources
According to obligations assumed by
Veterans Bank -authorized to grant loans for the bank
the establishment and empowered to grant -confirmed
loans to agriculturists in installments. -unconfirmed
According to method of
Land Bank - intended to finance the
reimbursement
acquisition by the Government of landed
-simple
estates
-reimbursement
Sales Finance Companies - private
According to the method of payment
corporate venture in the financing of
-Negotiation
distribution
-Straight
Chapter 4 -acceptance
-local currency
OTHER SOURCES OR CREDITS - foreign currency
-other classification (assignable, back to
INDIVIDUAL MONEY LENDERS-Primitive
back, red clause, revolving, traveler’s
societies had no need and use for money
letter of credit )
2types
Classification objects checks
-who grant loans as a personal
accommodation to friends and relatives Personal check
 Cashiers/ manager /treasurer check The Credit Department- gathering of al credit
information about the applicant and assembling
Certified check
The Credit Manager- a man who occupies a very
Traveler’s check
important position ni the structure of a credit
Post dated check economy

Rubber or bouncing check The Scope of Credit Investigation

Factors
-Purposes and types of investigation.
- Company credit policy.
-Client classification.
-Amount involved.
-Time and resource constraint.

Types of drafts Company's background/history-covers the

complete business record
Money order-bank money order or postal
money order. Types of business organization
Bank draft- is an order of a bank to
Single proprietorship
another bank
Partnership
trade or commercial draft- is an order to pay
used by merchants. Corporation
Sight or demand draft- is payable on Financial Conditions-summary form a breakdown
sight upon presentation to the drawer. of the financial statement of the company
Acceptance-originally an order to pay. It is a time Dealings with Government Lending Agencies-
draft. credit investigator concentrates on the size and
degree of fluctuations on borrowings
Trade acceptance- is an order of the seller
to the purchaser to pay a certain sum of THE CREDIT WORK- revolves around the
money presence and cooperation of a staff of trained,
Banker's acceptance- is when the bank experienced and capable personnel
accepts an order to pay
Kind of position
INVESTMENT CREDIT- instruments used are
promises to pay Supervisor -Handles the over-all
supervision of his section or department.
Bonds are long-term promissory notes
Long-term promissory notes -distinction Senior credit analyst- Assumes responsibility
between long-term and promissory notes of the supervisor in his/her absence.

EVIDENCES OF OWNERSHIP Junior credit analyst- assist senior credit

analyst
Stock Certificate-purchase of a share of
stocks. Senior appraiser- Receives and assigns
Stock Right-pre-emotive right attached to request for Appraisal Report to appraiser(s).
ownership
Appraiser- Conducts ocular inspection of
Chapter 6 properties offered as collaterals.
Senior credit investigator-Receives and
FACTORS IN FIXING TERMS assigns request for CIR to credit
investigator and sets date of completion.
-the nature and use of the commodity.
Credit investigator- Conducts checking
-the location. and evaluation of applicants for credit
accommodation as well as of existing
-the circumstances of the customer.
clients.
-the purpose behind the purchase.
Bank Appraisal Report
-the credit standing of the buyer.
Subject of appraisal -Name of registered
-the regulations enumerated ni codes of fair owner
practices.
Land identify-Land-area
Chapter 7
Description of land-Frontage, shape
Credit Management -find profits in the field of
Neighborhood data-Commercial, semi
business activity
commercial, industrial, other
Importance of Credit Management-granting
Public Utilities-electricity,water,
credit is one thing and collection another.
telephone, gas, etc ,.
The Credit Man in the Business World-keeping Improvements- Full description of
records of the financial transactions of the firm's improvements
customers. Valuation- market and appraisal values of
land
 Encumbrances- Names of mortgages and
amount

CREDIT POLICY- criteria covering the conditions

under which loans are made. A-policy has been
described as a "decision in advance".

types of categories of bank credits

1. Agricultural credits
2. Commercial loans
3 Industrial loans
4 Real estate loans
5. Consumer or personal loans
6. Term loans

THE CREDIT FILE-system of gathering and putting

every information about customers and applicants
into a folder

Theodore N. Beckman and Ronald S. Foster-

although limits are sometimes used as absolute
maxims of credit, nevertheless their general use is
ni the nature of danger signals

Principal Objectives of Credit Management

Maximizing sales.
Controlling the amount of receivables.
Controlling costs of credit and collection.

Types of Credit Limit

Quantitative credit limit

Temporary credit limit

SOUND CREDIT MANAGEMENT 3 E’s

Estimation

Enforcement

Evaluation

CREDIT FRAUDS-These dishonest firms and

individuals are known by various names and
employ various tricks.