Credit Management Practices of Lending Institutions in Manila

Abstract

This study attempted to assess the level of effectiveness of credit management practices of lending institutions in Manila. Thus, the following aspects were evaluated by the respondents: Character, Capacity, Capital, Collateral andCondition. A sample size of 108 was determined using the Slovin’s Formula. The researchers used the descriptive design and statistical tools such as: Frequency and Percentage, Ranking, Weighted MeanandAnalysis of Variance or ANOVA. Based on the results, the respondents assessed the credit management practices of lending institutions in Manila as ‘Very Effective’ in terms of Capacity and Condition, and ‘Effective’ in terms of Character, Capital, and Collateral. The null hypothesis was rejected because there is a significant difference when grouped according to these profiles: Age in terms of Capital, Collateral and Character while in Civil Status, Highest Educational Attainment, Type of Clients, Years of Working Experience, Job Position Level, Form of Business Organization and Number of Years in the Industry in Terms of all aspects. Based on the foregoing findings and conclusions, the researchers recommend that in order to improve in these aspects, the following must be considered: Educational Background, Standard of Living, as well as the Job Status of the clients may be regarded; prohibit the borrower to dispose his assets until loan is paid and consider the competitive landscape of the clients. Overall, lending institutions are effective because of their credit management practices, and taking note of the recommendations from this research could lead to the improvement of these practices.