Lesson 3 - Sources of Credit

CAPITAL

forms a large portion of the productive resources of any commercial country

a. To pool the savings of the lending customers

b. To invest these funds financially on the basis of careful investigation and analysis of credit

c. To diversify risk to a degree unattainable for individual investors.

d. To transform short term into long term funds through an expedient and careful staggering of maturity dates.

e. To perform insurance and trust function

what are the functions of credit?

financial intermediaries

what are the sources of credit?

FINANCIAL INTERMEDIARIES

this is where credit transactions are consummated

FINANCIAL INTERMEDIARIES

serves as middleman between lender and borrower

FINANCIAL INSTITUTION

It is a numerous just as they varied in kinds and in scope ranging from pawnshop to such credit institution as investment houses

FINANCING COMPANIES

these are the financing corporation or partnership which primarily organized for the purpose of extending credit facilities to consumer, industrial, commercial or agricultural enterprise.

RA NO. 5980

under what RA no. is this:

these are the financing corporation or partnership which primarily organized for the purpose of extending credit facilities to consumer, industrial, commercial or agricultural enterprise.

INVESTMENT HOUSES

concerned chiefly with the transfer of capital from those have more funds than they actually use to those who need for utilization in long term activities.

INVESTMENT HOUSES

It is an investment banks

INVESTMENT BANKING

It belongs to non bank sector of the system and gather funds for its lending operation from sources other than deposit.

COMMERCIAL BANKING

focuses on products and services that are specifically designed for businesses, such as deposit accounts, lines of credit, merchant services, payment processing, commercial loans, global trade services, treasury services, and other business oriented offerings.

INVESTMENT HOUSES

on which regulations is this under?:
• Minimum size of funds acceptance and receipts

• Methods of marketing and distribution

• Terms of placement and maturities

• Uses of funds as may be modified by the Monetary Board insofar as they apply to the investment houses

INVESTMENT BANKING

belongs to non bank sector of the system and gather funds for its lending operation from sources other than deposit.

SAVINGS AND MORTGAGE BANKING

Refers to any corporation organized for the purpose of accumulating the savings of depositors and investing them together with its capital in bonds or loan secured by bonds and some security loan activities.

RURAL BANKS

designed to provide the credit needs of borrowers in the rural areas within easy reach and access and at reasonable terms.

OPEN COUNTRY

AGRICULTURAL BANK

the term rural means ____ or another name for ____

RA NO.720

under what RA no. is the defined meaning of Rural Bank?

VETERANS BANK

is authorized to grant loans for the establishment, rehabilitation, expansion or development of any agricultural, commercial or industrial or personal services including public utilities as well as loan on or discount notes.

LANDBANK OF THE PHILIPPINES

intended to finance the acquisition by the government of landed estates for division and resale to small landholders as well as the purchase of the landholdings by the agricultural lessee from the landowner.

LANDBANK OF THE PHILIPPINES

provided under section 74 of RA no. 3844

SECTION 74 OF RA NO. 3844

the landbank of the Philippines is as provided by under what section?

SALES FINANCE COMPANIES

It is a private corporate venture in the financing of Distribution through the purchase of the vendor’s instalment sales contract.

REVOLVING CREDIT

TERM LOAN

STAND-BY COMMITMENT

LOAN AGREEMENT MAY PROVIDE FOR:

REVOLVING CREDIT

a business enterprise may finance its needs by borrowing form the bank on a short-term basis up to a certain specified maximum amount.

TERM LOAN

these are granted by commercial banks to finance the acquisition of facilities such as machinery and equipment by manufacturer.

STAND-BY COMMITMENT

the corporation is conferred the right of securing a term loan under certain specified terms for current or for some future purposes within the time agreed upon.