The Credit Investigation Practices of Selected Microfinance Enterprises

Abstract

This study described the credit investigation (CI) practices of selected microfinance enterprises (MFEs) in Camiling, Tarlac which gave way to identify the problems associated with those CI practices as well as to solve the problems they experienced in the examination and analysis of CI performance. Through questionnaires and unstructured interviews, relevant information was gathered from 101 respondents. Data were interpreted using frequency counts, weighted mean, percentages, and rankings. The study revealed that too much procedure in conducting credit investigation (CI) is not so convenient to be done and monitored by only one (1) Microfinance Officer (MFO). Hence, the researcher would like to recommend that CI be delegated exclusively to one (1) department or personnel. The result of the study disclosed that documentation gives inconvenience considering that there are too many documents required before starting the process of the loan application. It is recommended that the policy and practices of the MFEs on the gathering of potential clients’ data in conducting CI be revisited and reviewed for them to reassess the procedures and do necessary amendments if any. Further, the researcher strongly suggests to MFEs to include a post-evaluation stage in their credit investigation process. This additional stage would enable companies to gather information on how their services can be improved.