Republic of the Philippines

Biliran Province State University

(formerly NAVAL STATE UNIVERSITY)
School of Arts and Sciences
ISO 9001:2015 CERTIFIED

MODULE 2

credit and collection

lllll (FIN 213)

RICARDO P. MEJIA, MAEd

JADE C. JORNALES

Student’s Module 2

__________________________________________
Name of Student

_________________________________________
Year & Section
#WoWBiPSU
BiPSU VISION

A state university leading in research and innovation for

human empowerment and social development.

BiPSU MISSION

To advance the university through innovative human resource,

responsive research, sustainable production and demand-
driven extension services.

BiPSU CORE VALUES

Brilliance, Innovation, Progress, Service, & Unity

PURPOSE of the MODULE:
This part of the lesson wishes expose to the minds of the learners the
importance and purposes of credits not only to individuals but also to the
Businessmen and establishments. It will lead to learner’s appreciation on how
credits are availed of and the help of lending agencies to loan applicants. This
module will enhance the knowledge of students on how loans are processed.

TITLE and DESCRIPTION :

CREDIT: A SOCIO- ECONOMIC TOOL FOR
INCOME GERATION ABD OTHER USE
This will serve as a workbook for the learners in credit and loan collection.
It has forms which are currently used by credit institutions in client selection
and loan processing.

LEARNING PLAN

TOPICS

1. The Account Officer

A. Duties
1. Identify
possible clients
2. Conduct Credit
investigation 4 WEEKS
A. Client
Profiling
B. Credibility
test
C. Means test
D. Household
cash flow
3. Help clients
accomplish and
complete the
required
documents.
MODULE GUIDE
The instructor will orient the students on the activities to be assigned so that all
questions will be answered.

MODULE OUTCOME
Students can work as account officers in credit institutions equipped with
skills in:
1. Screening loan applicants.
2. Preparing cash flows to access amounts of loans to be granted to
applicants.
3. Conducting credit investigation and
4. Facilitating release of loan
5. Screening loan applicants.
6. Preparing cash flows to access amounts of loans to be granted to
applicants.
7. Conducting credit investigation and
8. Facilitating release of loan

MODULE REQUIREMENTS
You are required to submit your answers and be able to pass the required
assessment or evaluation activities provided in this module.
Specifically, the students will do the following:
1. Attend virtual classes as much as possible so that you can listen to the
2. Submit up to date outputs as needed. Submit outputs to the gmail below:
ricmejia1235@gmail.com within 2 days.
3. Visit your group chat for the tasks to be given.
4. Consult you instructor/classmates for matters which need to be cleared out.
5. Take the quizzes and major exams on time.
6. Orientation is given before every lesson. Participate in class discussion

7. Majore documents to be prepared:

A.Client’s profile index
B. Means Test for loan applicants
C. Household cash flow sheet
D. Loan application form
E. Loan contract/Promissory note.
 COURSE PRE-TEST
Answer the following questions:
1. Latest surveys reveal that: A. 30 B. 50 C. 70, per cent of the Filipinos
are very poor.

2. Entrepreneurs own the business and should provide the:

A. Skills and capital B. capital and information C. all needed items for
the business

3. Where can businessmen borrow additional capital?

4 What is a collateral?

5 What is “ tiklos”

6 What is an account officer?

7 Which of these is a quasi-bank A. thrift bank B. rural bank

C credit cooperatives D. service cooperatives.

8 What is a bank appraiser.

9 What are the Cs to be considered in granting credits?

10 What is credit investigation?

KEY TERMS TO LEARN

Cash Flow

Collateral

Credit investigation

Productive loan

Provident loan

Secured loan

Self –help and group action

 LESSON 1
THE ACCOUNT OFFICER/COLLECTOR:
ROLES AND DUTIES TO CLIENTS

OVERVIEW:
This part covers the skills that an account officer/ collector must posses
And the accomplishment of the necessary documents before credits are
granted to an applicant.

LET’S START
Activities will be assigned to students which will need instructions from
the instructor on how to go along /accomplish the requirement including the
time of submission.

Activity 1: CLIENT’S PROFILE INDEX

Instruction:
See the sample index. Look for a person who had already loaned from a
Credit agency and conduct an interview using the Profile Index. Submit the
filled up index form two days after the activity was given.
 CLIENT’S PROFILE INDEX

I. PERSONAL

Name:_____________________________________ Age:____ Sex:____________

Birthdate:________________ Birth Place:__________ Civil Status:____________
Religion:______________________ Educational Attainment:_________________
Livelihood:______________________ Monthly Income:_____________________
No. of years in residency:________________ Tel. No:______________________
Spouse:____________________________ Age:_________ Sex:_______________
Occupation:________________________ Monthly Income:__________________

II. HOUSEHOLD MEMBERS

Name Relation Age Civil Educ’tl Occupation Monthly
Status Background Income
___________ ___________ ____ ________ ___________ ____________ _______
___________ ___________ ____ ________ ___________ ____________ _______
___________ ___________ ____ ________ ___________ ____________ _______
___________ ___________ ____ ________ ___________ ____________ _______
___________ ___________ ____ ________ ___________ ____________ _______
III. Family Assets
1. House: ( ) Inherited ( ) Constructed ( ) Rented ( ) Purchased
Year Acquired _____ Acquisition Cost _______ Fair Market Value ____
2. Land : ( ) Inherited ( ) Purchased Acquisition Cost_____ Model Required__

3. Appliances:

Item Year Acquired Acquisition Cost Estimated Market Price

_____________ _____________ __________________
______________________
_____________ _____________ __________________
______________________
 _____________ _____________ __________________
______________________
_____________ _____________ __________________
______________________
_____________ _____________ __________________
______________________
IV. HOUSEHOLD EXPENSES
Nature Expenses/Month Simple Sketch of the client’ residence
1. Food ___________________
2. Clothing ___________________
3. House Rental ___________________
4. Education ___________________
5. Light and Water ___________________
6. Miscellaneous ___________________
V. SOCIAL HEALTH STATUS
1. Common Sickness ___________________
2. Common Causes of death _______________
3. Toilet Facility ___________________
4. Source of Water ___________________
5. Health Services ( ) Public ( ) Private

GENERAL ASSESSMENT
1. Economic Status ( ) Very Poor ( ) Poor ( ) Average ( ) Well to do
2. Peace and Order ( ) Good ( ) Fair ( ) Sad ( ) Risky
Interviewed by: _____________________________ Date: _______________
Account Officer
LET’S ANALYZE

THE CREDIBILITY TEST:

This is a measurement on how good a person/ company as a loan payer.

It will be a good source of information if this applicant has unpaid loans,
multiple loans, or has no current loan. It can uncover information if there are
collectors coming but could not collect payments.

ACTIVITY 2

Direction:
Go to the neighbors of the client interviewed in Activity 5 and look for one
who is near his house. Ask questions about his character and attitude towards
Credit. Use the form below and submit it online within two days.

CREDIBILITY TEST:

Name of Interviewee__________________________
Name of client_____________________________________

Are you close/related to the applicant? Yes_______ No _______

How long do you know the applicant___________ yes.
Does he/she have loans from agencies? _____ yes _____no ______
If the answer is yes: What agencies ___________________
Particular persons whom loaned_
Is he a good payer? Yes______ No_______________
Can you observe creditors who come to collect payments?_____ yes
No___.
How long . ________________________
Did he buy appliances/ car/ Other goods by installments? ___yes
No _____
Are these things still in their possession? ___ yes ___no.

Other information gathered:

Comments:

______________________________________________________________
Accomplished by:
_______________________

LET’S DIG DEEPER

THE MEANS TEST:

This assessment will help in the credit investigation. The
information to be gathered are more on the assets of the loan applicant.
This is to be filled up by the loan applicant. To avoid bloating of figures,
the Account officer may do the task so that it will be more credible for
the companies purpose.

ACTIVITY 3

Direction: Have an interview with the identified applicant. It is best if

the interview is done in the house for secrecy/ privacy reason.
Accomplish the form and submit it online within two days.

MEAN’S TEST

1. Size of the House Big ( ) Medium ( ) Small ( ) ______________

2. Number of Floors One ( ) Two ( ) Three or more ( ) ____________
3. Overall Structure New & Strong ( ) Old but Strong ( ) Weak ( ) ___
4. Roofing New GI Sheets ( ) Old GI Sheets ( ) Nipa ( ) _________
5. Walls Cement ( ) Wood ( ) Indigenous Materials ( ) ________
6. Land Ownership Own ( ) Inherited ( ) Rented ( ) Shared ( ) _____
7. Water Faucet ( ) Pump ( ) Well ( ) Public ( ) ____________
8. Electricity Own line ( ) Share ( ) None ( ) _____________
9. Comfort Room Flush ( ) Waterseal ( ) Pit ( ) None ( ) __________
10. Kitchen LPG/electric ( ) Kerosene ( ) Wood ( ) ____________
11. Refrigerator New ( ) Old ( ) None ( ) _________________
12. Table and Chairs Wooden/old ( ) Wooden/new ( ) Bamboo ( ) ____
13. Television New ( ) Old ( ) None ( ) _________________
14. Stereo & Radio New ( ) Old ( ) None ( ) _________________
15. Vehicles
a. Car/Jeep New ( ) Old ( ) None ( ) _________________
b. Tricycle New ( ) Old ( ) None ( ) _________________
c. Bicycle New ( ) Old ( ) None ( ) _________________
d. Motorcycle New ( ) Old ( ) None ( ) _________________
 NAME OF ADDRESS AMOUNT STATUS REMARKS
CREDITORS

1.

2.

3.

4.

5.

6.

7.

ASSESSMENT: Passed ( ) Failed ( )

BACKGROUND AND CREDIT INVESTIGATOR REPORT

1. Findings with different banks/lending: Negative ( ) Past ( ) Delinquent ( )
Current ( )
2. Findings with various stores :Negative ( ) Passed ( ) Delinquent ( )
Current ( )
3. Community background : Good Payer ( ) Bad debtor ( ) Risky ( )
4. Other Findings :______________________________________
______________________________________
______________________________________

Accomplished by:

___________________________
Account Officer / Bank assessor
 HOUSEHOLD CASH FLOW:

A cash flow is a record that will show the amount of money received
and the amount disbursed in a certain period of time. This measurement
Is only applicable to be used for individual loan applicants which is
solely paid by the applicant. For companies and agencies who apply
loans from the banks or BSP, the income statement and Balance Sheet
will be used.

This is to be accomplished by the applicant and be assessed by the

account officer to know how much amount is really available for debt
servicing.

ACTIVITY 4
Sample Cash Flow Sheet
Direction: Talk with the identified loan applicant and gather the
information needed. Compute how much is the money available for debt
servicing per week/month depending on the collection requirement of
the lending agency.

Sample Cash Flow Form

Amount Conversion
Business Daily Weekly Monthly Daily/Weekly/Monthly
Income from Sales
Business1
Business2
Business3
Total Business Income
Business Expenses
Raw Materials/Purchases
Business1
Business2
Business3
Salaries and Wages
Rent
Utilities
Transportation Expenses
Fuel
Other Business Expenses
Total Business Expenses
NET BUSINESS INCOME
Other Household Income
Salaries and Wages
Pension
Remittances from other
family members
Other Income Sources
Total, Other Household
Income
Total, Business & Other
HH Income
Household Expenses
Food
House Rent
Education and School
Allowance
Utilities
Transportation
Medical Expenses
Insurance Premium
Other Loan Payments
Other Expenses
Total, Household
Expenses
NET BUSINESS &
HOUSEHOLD INCOME
Debt Capacity Analysis
Amount Available of Debt
Service ( 30% of the NET
household and business
income)
Maximum Loan Amount for
____ months (approved)
Adjusted Dept Capacity
@35%
Interest Rate for ___months
Weekly amortization

ACCOMPLISHED BY:
Approved: _________________________________________________________
Account Officer

LET’S APPLY
Activity 5 Preparing the Cash Flow Sheet
Prepare a household cash flow and recommend the amount which should
be allowed to be loand out to the applicant using the problem below. Submit
your output online after an hour.
Problem:
Mrs. Dimaculangan is a store owner. Her husband works in a private
company and gives her the salary worth Pp 12,000.00 per month. Her
daughter is a nurse and gives her an allowance of Pp 5,000.00 a month. The
sales of the store is P1,000.00 a day. She goes to market to buy goods weekly
spending Pp 5,500.00 with a fare of Pp 20.00 to market and Pp 25.00 in going
home. She buys a load for P1,000.00 and can sell Pp 1,200.00 monthly. Spend
spends Pp7,800. Per month for food for family consumption , Pp 750.00 for
electric bill and Pp 200.00 for water bill monthly. A tube of gassul cost her
P800.00 per month is spent. One child studies and spend Pp 500.00 weekly for
allowances and fare.
She would like to loan from Paspas Loan Agency and applied for a Pp
40,000 credit. Would she be allowed? How much should be granted.

POST TEST;
Answer the following questions.
1. What should be done to assess the paying capacity of a loan applicant.
2. Interview of neighbors is done to assess the attitude of the loan
applicant. It is a: A. personal test B. Means test C. credibility test.
3. Which of the following is NOT included in the cash flow:
A. Pension B. Medical expense C. money borrowed by a friend.
4. Give five examples of cash outflow in a household:
A. _______________ B_________________________
 B. ___________________ D._________________________
A. _____________________
5. Why is it that the attitude of a loanb applicant be known to the agency
Who will grant the loan?

______________________________________________________________
______________________________________________________________

References:
Books
Fajardo and Manansala. Central Banking, 4th ed. Phoenix Pub. House Manila.
2008.
Fajardo. Money, Credit and Banking. Phoenix Pub. House. Manila 2010.
Mutya, Ruby. Introduction to Money Credit and Banking. Anvil Publishing.
Manila. 2014.
Pagoso, Cristobal. Money, Credit and Banking. Rex Book Store. Quezon City.
2010

Legislation
Congress of the Philippines. Philippine Cooperative Code of 2008. Quezon
City. Feb. 2009.
Congress of the Philippines. R.A. 9510: An Act Establishing the Credit
Information System and For Other Purposes. Quezon City. 2008.

Internet References
Shankar, Silva. Credit Defined. https. /www.debtorg.2012