Thursday, November 23, 2006 Lenders can be blamed for nonpayment of loans
LACK of awareness about the lending industry and not delinquent debtors is the challenge faced by Cebu’s lending institutions, according to an official from Visayas Goodwill Credit Corp (VGCC).
“There’s less traffic in lending companies because people are not aware of its benefits. Delinquent debtors are not really a problem if, in the first stage, a lending company has properly assessed the client,” VGCC resident manager Helbert Elbiña said.
However, Elbiña stressed the industry needs “enough awareness” if it wants to gain profit while maintaining customer satisfaction.
“Too much awareness is not also good because it might lead to clogging up and dissatisfaction from customers. People should understand that while credit is good to increase wealth and expand purchasing power, it’s not for everyone. Lending companies need to exert effort to really assess all applicants,” he told Sun.Star Cebu.
Organize
Elbiña said there is a plan to organize lending firms in Cebu to address the challenges faced by the industry.
In a seminar on basic credit management held by Credit Information Bureau Inc. (Cibi) yesterday at the Cebu Midtown Hotel, Cibi stressed the need to reduce or eliminate credit losses arising out from wrong credit decisions, fraud and ineffective collections.
Credit management is a complete cycle of judicious lending, portfolio servicing and maintenance, effective collections and loss recovery. It aims to maximize sales, control the amount of receivables, and manage the costs of credit and collections, according to a statement furnished by Cibi to Sun.Star Cebu.
The seminar stressed on the need for lending firms to create a credit profile — a systematic collection of validated data concerning an applicant’s personal information- for every customer.
Seminar materials warned lending institutions that when in serious doubt about their ability to collect a loan, it is wise never to release the money at all.
Assess
“You have to carefully assess the capacity of the debtor before giving the exact loan, and always verify the purpose of the loan. Lending companies should know that when the value of the collateral is lesser than the loanable amount, chances are the debtor will have past dues, and maybe fraudulent at times,” Elbiña said.
In an earlier interview, Cibi Visayas and Mindanao area manager Ed Limtingco raised the need for Filipinos to maintain credit discipline.
Cibi, an information provider, now has a database that Cebuano lenders can use to trace delinquent debtors online.
Cibi members can access comprehensive reports of companies and individuals, court cases filed in major key cities and municipalities, cancelled credit cards referred to Cibi for collection, bank loan exposures and real estate mortgages. (MMM)
