w5 flowchart to prescreening

target market identification

a process where the lending unit identifies the client base and credit program facilities it will pursue. It is done cognizant of the general policy, program thrusts, strategies and targets of the company, the business environment, market information, present portfolio mix, risk asset acceptance criteria and resources of the lending unit.

account origination or prospecting

refers to the introductory and exploratory discussions the account officers do in relation to credit initiation. It is when the account officer introduces the products and services that may be relevant to the prospective client. Before any origination exercise is done, it is advisable that the account officer secures relevant information on his prospects including financial and related interests. Thus, it requires good staff work and preparation.

duly filled credit application provides

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

• information on which to further interview the applicant

• with some “leads” on which to start the credit investigation process

receipt of credit application

The first activity in the Credit Department as it starts actual operation of its functions is the credit application. It must have a credit application form for use by its prospective customer/client. 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.

individual

1. Latest Income Tax Return

2. Marriage Contract (if married)

3. Photograph

single proprietorship

1. Business Information Sheet

2. Certificate of Business Name Registration with the DTI

3. Income Tax Return

4. Audited Financial Statements

5. Statement of Assets and Liabilities

6. Photograph of principal/owner

partnership/corporation

1. Business Information Sheet

2. Copy of Registration with the SEC

3. Articles of Incorporation and By-Laws (for corporation)/Articles of Co-Partnership and Partner’s Resolution (for partnership)

4. List of Officers and Directors certified by the Corporate Secretary

5. Bio-data/Personal Information of Officers and Directors

6. Alien Registration Certificate of foreign officers

7. Audited financial statements

8. Board Resolutions to borrow or enter into the requested facility in the amount of, and designated authorized representative to negotiate and sign in behalf of the company

The requirements are by no means complete. The account officer, however, should ask for other requirements for them to better evaluate the proposed credit transactions. Therefore, the list may be expanded/shortened depending on the industry/project

pre-screening

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. The interview is conducted to obtain, confirm and verify information about the applicant which is sufficiently reliable, acceptable, and complete to facilitate sound credit decisions. In many cases, the credit interview may not be enough to accumulate adequate and complete information. In which case, a full-blown credit investigation will have to be conducted. If the applicant is not qualified, discuss to the applicant the reasons for his disqualification.