Credit Investigation/

Background Investigation

Microfinance Loan Flow Chart

1) Client Orientation 2) Credit and Background 3) Loan Approval

and Application Investigation

6) Loan Collection 5) Loan 4) Loan Processing

Disbursement
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 Importance of CIBI

Improper CIBI can LEAD to serious loan

delinquency problems.
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Importance of CIBI

A thorough CIBI can PREVENT serious

loan delinquency problems.
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 Objectives of CI/BI

• Verify if the information supplied by the applicant in

his/her loan application are true

• Determine the character of the applicant, particularly,

his/her reputation as a borrower

• Determine the applicant’s capacity to pay

Steps in Conducting the CI/BI

The CI/BI is discontinued and the loan application

rejected, if at any point in the CI/BI process, any adverse
finding about the applicant is reported and duly
validated by the AO.

1. Visit the applicant’s place of business and conduct the interview

using the CI form as guide. Observe the general condition of
the business. Inspect business license, records and receipts,
especially of loan payments, if available.

2. Visit the applicant’s residence to assess his/her living

condition and whether the spouse knows about and
supports the loan application. Check receipts for utility bills if
payments are on-time or delayed.

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 Steps in Conducting the CI/BI
3. While in the house, check for assets which can be used
as an additional guarantee by the applicant. Look for
receipts or documents to prove his/her ownership of
these assets.
4. Interview business and residential neighbors,
suppliers and creditors about the reputation of the
applicant in the community, especially in honoring
obligations.
5. Check records at the barangay office for any
complaint made against the applicant, especially
involving the collection of debt. Also interview a
barangay official who knows the applicant.
6. Verify if the applicant has any current or previous loans with
the bank and other financial institutions in the area.

Steps in Conducting the CI/BI

7. Interview the co-makers and find out if they are willing
and able to guarantee the loan being applied for the
applicant.

8. Analyze the applicant’s cash flow to determine

the amount of the loan that can be granted to
him/her.

9. Prepare/finalize the CI report

10. Sign, then, submit the CI report to the MFU

Supervisor

11. Be prepared to defend your CI report and to gather

other relevant information which the MFU Supervisor
may need in reviewing your report