Operations Review Training Course

1

Operations Review Training Course

Documents Review

August 25, 2004

Villa Margarita, Davao City

Eduardo N. de Castro

Area Manager for Mindanao

Resource Person

2


(1)

Document Review

Of

Loan Application Form

3

Loan Application Form

PERSONAL DATA

Name: Nickname:

Identification Number: Type Of ID:

Home Address:

Telephone:

Date Of Birth: Age: Place Of Birth:

Sex: Male Female Civil Status: Single Married Widowed Separated

Name Of Spouse:

Occupation Of Spouse:

Number Of Dependents:

Home Ownership: Owned Rented Mortgaged Shared/Others

Number of years in the community:

4

BUSINESS ACTIVITY

Type Of Business:

Business Name & Address:

Business Telephone: No. Of Years In The Business:

Business Partner (If Any):

Estimated Business Assets: Estimated Monthly Sales:

Is your business registered? Yes No

Who looks after your business when you’re sick or away?

Are you involved in any other business activity? Yes No

If yes, what type of business?

Are you employed apart from owning a business? Yes No

If yes, where? Office Telephone:

Status Of Employment: Regular Contractual Others

Name Of Employer:

Address Of Employer:

5

PURPOSE OF LOAN

How much do you want to borrow? P__________ For how long? 1 month 2 months 3 months

Purpose of loan?

How often can you afford to pay? Daily Weekly MonthlyHow much can you afford to pay? P_______ P_______ P_______

Do you have any outstanding loan? Yes No

Does your spouse have any outstanding loan? Yes No

If yes, how much is your outstanding loan? P__________

If yes, how much is his/her outstanding loan? P________

Name Of Creditor/Supplier:Name Of Creditor/Supplier:

Name at least one creditor/supplier that you have borrowed from in the past:1.2.

Do you have a bank deposit? Yes No What bank?

6

AUTHORIZATION

I confirm that the above information is true and correct to the best of my knowledge. I am aware that any false statement may be an immediate cause for denial of this loan. In connection with this application, I authorize the RB of XYZ, Inc. to obtain such other information as may be required. This authorization includes obtaining information from suppliers, commercial banks, rural banks, and all other creditors while releasing these institutions from liability under any and all bank secrecy laws. SIGNATURE OF APPLICANT _______________________________ DATE/PLACE _______________ SIGNATURE OF SPOUSE _________________________________ DATE/PLACE _______________

7

Loan Application Review

Ensure:

•All information stated are adequately provided by the client•All information are properly stated and accomplished in the application form as basis for verification from other sources•Signatures of both the loan applicant and spouse are affixed in the loan application form.

8


(2)

Document Review

Of

Repeat Loan Application Form

9

Repeat Loan Application Form

PERSONAL DATA

Name:

Home Address:

Home Telephone:

Business Name and/or Address:

Business Telephone:

If employed, Employment Address:

Office Telephone:

10

PURPOSE OF LOAN

How much do you want to borrow? P__________ For how long? 1 month 2 months 3 months

Purpose of loan?

How often can you afford to pay? Daily Weekly MonthlyHow much can you afford to pay? P_______ P_______ P_______

11

CREDIT HISTORY (For Bank Use Only)

Date

Loan Amount

Amount of Payment/ Frequency

# of On-time Payments

# Of Late Payments

1-7 Days 8-14 Days15-30 Days

Over 30 Days

12

AUTHORIZATION

I confirm that the above information is true and correct to the best of my knowledge. I am aware that any false statement may be an immediate cause for denial of this loan. In connection with this application, I authorize the RB of XYZ, Inc. to obtain such other information as may be required. This authorization includes obtaining information from suppliers, commercial banks, rural banks, and all other creditors while releasing these institutions from liability under any and all bank secrecy laws. SIGNATURE OF APPLICANT _______________________________ DATE/PLACE _______________ SIGNATURE OF SPOUSE _________________________________ DATE/PLACE _______________

13

Repeat Loan Application Review

Ensure:

•All information stated are adequately provided by the client•All information are properly stated and accomplished in the application form as basis for verification from other sources•Signatures of both the loan applicant and spouse are affixed in the loan application form.

14


(3)

Document Review

Of

CI/BI Form

15

ABC RURAL BANK, INC.

CREDIT INVESTIGATION FORM

NAME OF APPLICANT:

Business Registration/Stall Lease Agreement Number (if any):

MAIN BUSINESS ACTIVITY: NO. OF PAID EMPLOYEES:

16

HOUSEHOLD COMPOSITION

HOUSEHOLD MEMBERS AND DEPENDENTS (Starting with

Proprietor)

CURRENT OCCUPATION/ECONOMIC ACTIVITY

REGULAR MONTHLY INCOME

SCHOOL / BUSINESS/EMPLOYMENT ADDRESS

SIZE OF HOUSEHOLD TOTAL MONTHLY HOUSEHOLD INCOME

17

WORKPLACE CHARACTERISTICS

Owned Home-based Rented Ambulant Shared Others (specify)

PAYMENT RECORDS

Bills (e.g.) Documents Supplied Comments (on-time/delinquent payments, etc.)

Water

Electricity

Installment Plan

Mortgage/Rental payments

5-6 payments

18

INVENTORY OF ASSETS

QTY DESCRIPTION CONDITION VALUE AMOUNT OWED

TOTAL FIXED ASSETS

19

RESULT OF INTERVIEW WITH CREDITORS/SUPPLIERS

FOR SUPPLIER/CREDITOR ONLY: Supplier/Creditor 1 Supplier/Creditor 2

1. How long have you known the applicant?

2. Are you a relative of the applicant?

3. How long have the applicant been purchasing/borrowing from you?

4. Based on your experience, is he/she a reliable/unreliable borrower?

5. Did you have any problem collecting from the applicant? If yes, why?

Date of Interview:

20

CREDIT HISTORY

Name/Address of Creditor/SupplierPrevious

Loan AmountOutstanding

Loan AmountDue Date

Amount of Payment/

Frequency

1.

2.

3.

21

RESULT OF INTERVIEW WITH CHARACTER REFERENCES

Name and Address of Barangay Official (indicate position) and Date of Interview:


2. How long has the applicant lived in the community?

3. Has the applicant been involved in a legal case or dispute? If yes, what is it?

4. How would you assess the character of the applicant?

5. Do you know if he/she has vices?

6. Is he/she known to borrow loans?

7. Is he/she known to be a reliable/unreliable borrower?

22

Name and Address of Co-Maker/Neighbor, Occupation, and Date of Interview:

1. How long have you known the applicant?


3. Has the applicant been involved in a legal case or dispute? If yes, what is it?

4. How would you assess the character of the applicant?

5. Do you know if he/she has vices?

6. Is he/she known to borrow loans?

7. Is he/she known to be a reliable/unreliable borrower?

8. Would you be willing to guarantee for his/her loan?

9. Would you be willing to lend him/her money out of your own pocket?

23

ACCOUNT OFFICER’S OBSERVATIONS/CONCLUSION

Name/Signature of Account Officer: _____________________________

Date ______________________

24

CIBI Review

•Check if CIBI properly accomplished. •Verify some information contained in the CIBI with the loan application form (business, number of dependents, income and expenses).•Check accuracy of cash flow computation in relation to amount of loan granted. Look for inconsistencies in the amounts provided (overstated sales; understated expenses). Compare previous cash flows with the present. If necessary, re-compute cash flow to re-determine amount for comparison.•Check if additional information are provided from other sources (suppliers, barangay, neighbors, etc.)•Take note of AO’s observations conclusions. Signature of AO must be affixed in the CIBI report

25


(4)

Document Review

Of

Co-makers Profile Form

26

CO-MAKER’S PROFILE

PERSONAL DATA

NAME:

NICKNAME:

I.D. NUMBER: TYPE OF I.D.

DATE OF BIRTH: SEX: M F

HOME ADDRESS:

HOME OWNERSHIP: Owned Rented Housing Plan Shared/Others

NO. OF YEARS IN THIS ADDRESS: NO. OF YEARS IN THE COMMUNITY:

CIVIL STATUS: NO. OF DEPENDENTS:

NAME OF SPOUSE:

TELEPHONE NUMBER (if any):

27

EMPLOYMENT AND ECONOMIC ACTIVITY

IF EMPLOYED: IF SELF-EMPLOYED:

NAME OF SUPERIOR/EMPLOYER:

BUSINESS NAME:

NAME OF COMPANY:

BUSINESS ADDRESS:

COMPANY ADDRESS:

NATURE OF BUSINESS:

TELEPHONE NUMBER: TELEPHONE NUMBER:

NATURE OF BUSINESS: NAME OF BUSINESS PARTNER (if any):

POSITION IN THE COMPANY: SHARE IN THE BUSINESS:

NO. OF YEARS WITH THE COMPANY: NO. OF YEARS IN THE BUSINESS:

REGULAR MONTHLY SALARY: REGULAR MONTHLY SALES:

OTHER SOURCES OF INCOME (if any):

28

REAL ESTATE OWNERSHIP

DESCIPTION/LOCATION RECORDED IN THE NAME OF: ASSESSED VALUE

MONTHLY MORTGAGE PAYMENT

I hereby affirm that all information given above is true and correct. _______________________

Signature of Co-maker __________________

Date

29

Co-Maker’s Profile Review

Ensure:•All information stated are adequately provided by the co-maker.•Completeness of information are properly accomplished in the document and such can be verified from other sources•Sources of income of the co-maker to guarantee loan•Signature of co-maker affixed on the document.

30


(5)

Document Review

Of

Promissory Note/Co-Makers Statement Form

31

PROMISSORY NOTE/CO-MAKERS’ STATEMENT

PN No.__________________________________ _________________________, Philippines

Date Granted______________________________ Maturity Date________________________

Type of Loan______________________________ Interest Rate _____________________(%)

Term/Period of Loans_________________ Mode of Repayment _____________

Amount of Installment_________________

Date of Installments: first Installment to fall due on ________and every _______therafter until the

whole sum of the principal and interest shall have been fully paid. Penalty of ______shall be imposed per day on the amount of installment due from date of default until fully paid.

This note is secured by: _________________________________________________________

32

FOR VALUE RECEIVED, I/WE jointly and severally promise to pay the RURAL BANK OF XYZ, INC. the sum of PhP ________________________________________________ (P______________).

I/WE hereby agree and authorize RURAL BANK OF XYZ, INC. to encumber, assign or sell to any person or entity any right which may have under this Note and/or any assignment, mortgage lien, pledge or other encumbrances constituted in favor of RURAL BANK OF XYZ, INC. pursuant to the provisions of the loan agreement and this Note, if any the consent herein granted is recognized and acknowledged by me/us as a waiver, to all intents and purposes of whatever right I/we may have to notice of actual encumbrances or assignment.

Should a delay be made in the payment of an installment of at least __________ days, the whole sum remaining unpaid under this Note shall forthwith become due and demandable without need of further demand. In such case, I/WE jointly and severally agree to pay an additional amount equivalent to P_________ per day due and demandable as penalty and collection charges in the form of liquidated damages until fully paid and ten percent (10%) thereof or P1,000.00 whichever is higher for attorney’s fees whether actually incurred or not, exclusive of cost and judicial/extrajudicial expenses.

Further, I/WE jointly and severally empower and authorize the RURAL BANK OF XYZ, INC. the option, and without notice, to set off or apply to the payment of this Note any and all funds which may be in their hands on deposit or otherwise belonging to the corporation or one or anyone of us which may be in their possession or control by virtue of any other contract.

DEMAND AND DISHONOR WAIVED. Holder may accept partial payment reserving his/her rights or recourse against each and all endorsers.

VENUE OF ACTION. I/WE agree that any action arising in connection or by reason of this Note shall be filed exclusively with the courts in XYZ, (Province) .

I/WE hereby affix my/our signature(s) at _________________________________________________, Philippines, on ___________________________________.

33

MAKER

Signature: _______________________________________________

Name in Print:

________________________________________________________

Address: ________________________________________________

________________________________________________________

MAKER

Signature: ____________________________________________________

Name in Print:

_____________________________________________________________

Address: _____________________________________________________

_____________________________________________________________

I agree to become a co-maker to this Promissory Note. I am aware of the responsibility which I will assume in signing such a note.

CO-MAKER

Signature: ________________________________________________

Name in Print:

_________________________________________________________

Address: _________________________________________________

_________________________________________________________

CO-MAKER

Signature: ____________________________________________________

Name in Print:

_____________________________________________________________

Address: _____________________________________________________

_____________________________________________________________

SIGNED IN THE PRESENCE OF:

Name and Signature of Witness Name and Signature of Witness

34

Promissory Note/Co-makers Statement Review

Ensure:•Completeness of information contained in the note•That all necessary information are properly accomplished and stated in the note.•Signatures of borrowers, co-makers, and witnesses are affixed in the note. Compare signatures of borrowers and co-makers with the loan application and co-makers profile, respectively.

35


(6)

Document Review

Of

Disclosure Statement Form

36

Doc. 9

RURAL BANK OF XYZ, INC.Town XYZ, Province

DISCLOSURE STATEMENT

(As required Under R.A. 3765, Truth in Lending Act)

1. LOAN GRANTED P ________________ (A)2. FINANCE CHARGES

a. Interest of _____% p.a. for ______ days P _________________b. Non-interest charges _________________c. Processing fee _________________d. Service fee _________________e. Other charges P _________________

TOTAL FINANCE CHARGES p _________________(B) 3. NON-FINANCE CHARGES

a. Insurance Premium P _________________b. Taxes _________________c. Documentary/Science Stamps _________________d. Notarial Fee _________________

TOTAL NON-FINANCE CHARGES P _________________(C)

4. AMOUNT DELIVERED OR “CASH PRICE”

(Loan amount less up-front finance and non-financial charges) P _________________(D)

5. AMOUNT TO BE FINANCED (D Plus C) P _________________(E) 6. ANNUAL RATE: R = (B) x 12 x 100 = _____________ % p.a.

(E) Nos of Mos. to Mat. We acknowledge receipt of this statement prior to the consummation of the credit transaction and that we understand and fully agree to the terms and conditions thereof. Nadawat namo kining Disclosure Statement sa wala pa matuman ang transaksiyon ug kami nakasabot ug nagauyon sa tanang termino ug kondisyon sa loan. CALCULATION CERTIFICATION:

____________________________ ____________________________

(Borrower/s)__________________________ Account Officer

37

Disclosure Statement Review

Ensure:

•Completeness of all necessary information and are properly accomplished in the statement.•Accuracy of financial & non-financial computations.•Signatures of the borrower and account officer and/or branch officer are affixed in the disclosure statement.

38


(7)

Document Review

Of

Security Agreement Form

39

SECURITY AGREEMENT

This Security Agreement is made and entered into by______________________________, hereinafter referred to as the BORROWER, and the Rural Bank of __________ with a principal office and place of business at _________________, hereinafter referred to as the CREDITOR. As security for the payment of a loan obtained by the BORROWER from the CREDITOR in the amount of ______________________________Pesos (P__________) plus interest at the rate of __________________percent (____%) per annum, payable on the dates mentioned in the Promissory Note signed on __________________, the BORROWER provides the following items:

40

BRAND/MODEL KIND/TYPE YEAR VOLUME SERIAL NO. OR MARK OF OWNERSHIP

41

The BORROWER warrants that he/she is the absolute owner of the listed items and that the same are free from liens and encumbrances, and that the same shall not be moved from their location without the written consent of the CREDITOR. The BORROWER further agrees that the CREDITOR may confiscate the above mentioned items should the BORROWER default in his/her payments as set forth in the Promissory Note. Affidavit of Good Faith: We also swear that this Security Agreement is made for the purpose of securing the obligation specified and for no other purpose, and that the same is a just and valid obligation and one not entered into for the purposes of fraud.

IN WITNESS WHEREOF, the parties have hereunto affixed their respective signatures this ___ day of __________, ______ at _____________________________, Philippines.

_________________________ RURAL BANK OF ______________

BORROWER CREDITOR

__________________________ BY: ____________________________________

SPOUSE/CO-BORROWER NAME OF AUTHORIZED REPRENTATIVE

SIGNED IN THE PRESENCE OF:

___________________________ _________________________

Name and Signature and Witness Name and Signature of Witness

42

Security Agreement Review

Ensure:•Completeness of information provided by the client•That all necessary information had been adequately provided (serialized assets). Compare previous agreements signed from previous loan availments to check on consistency of assets and related values.•Signatures of the borrower and authorized representative of the bank are affixed in the security agreement.

43


(8)

Pro-Forma

Of

Working Sheet

44

1. Loan Recommendation Sheet 2. Application/Repeat Loan Form 3. Promissory Note 4. Disclosure Statement 5. Co-makers Statement 6. Co-makers Profile 7. CI/BI 8. Cash Flow Analysis 9. Security Agreement 10. Deed of Assignment 11. Voluntary Offer to Surrender

Name of Borrower: _________________________ PN No.: _____________________________ Name of AO: _________________________ Loan Details

Loan Cycle: __________________________ Loan Amount:________________________ Loan Term: __________________________ Mode of Repayment: ___________________ Nature of Business: ____________________ Current Savings Balance: _______________

12. Others 1. Loan Recommendation Sheet 2. Application/Repeat Loan Form 3. Promissory Note 4. Disclosure Statement 5. Co-makers Statement 6. Co-makers Profile 7. CI/BI 8. Cash Flow Analysis 9. Security Agreement 10. Deed of Assignment 11. Voluntary Offer to Surrender

Name of Borrower: _________________________ PN No.: _____________________________ Name of AO: _________________________ Loan Details

Loan Cycle: __________________________ Loan Amount:________________________ Loan Term: __________________________ Mode of Repayment: ___________________ Nature of Business: ____________________ Current Savings Balance: _______________

12. Others