Processing of Loan Applica1ons
Using Net Books
First Macro Bank
2010 RBAP‐MABS Na.onal Roundtable Conference
Hya= Hotel and Casino, Manila
June 3, 2010
Credit Scoring System
• In 2005, in partnership with IPA, FMB Implemented
Credit Scoring System in processing of loans for its
microﬁnance opera.ons par.cularly with its
Individual Lending Program (UNLAD).
• Loan decisions are made through the use of
Computer SoSware‐the System tells whether a Loan
Applica.on is denied or approved.
• Weights used where based on the interviews among
Bank Staﬀ regarding their considera.ons in
approving a loan.
2009 Second Phase of CSS Study
IPA recommended the use of mobile device in the facilita.on of
the Credit Scoring System.
Ini.al idea is to use PDA’s, but
because of its limita.ons to run
diﬀerent kinds of soSware,
netbooks were used instead.
Credit Scoring Model is now based on Historical Data of all Loan
Applica.ons from 2006 – 2008, not on percep.on of bank
staﬀ making loan decisions more objec.ve.
Advantages of doing CSS on Netbooks
‐ Allow most of loan applica.on to be conducted in ﬁeld
leading to reduc.ons in travel .me and data entry.
• Data Quality:
‐ SoSware has checks for most variable and ﬁeld entries that
can improve consistency and quality of loan applica.on data.
• Ease in encouraging clients to get documentary
‐ Since Loan Applica.on is pre‐approved, clients are easily
encouraged in ge^ng their loan requirements.
• Expedites Loan Applica>on Process
‐ In about 30 – 45 minutes client can be able to know the ini.al
result of loan applica.on
‐ Hassle Free in ﬁlling up of Loan Applica.on Form for clients.
Advantages of doing CSS on Netbooks
• Loan approval and impact surveys are done at the
‐ Interest Rate and Loan Usage Study
‐ Progress out of Poverty Index (PPI)
• Reduce paper work for ﬁeld oﬃcer
‐ Loan report are ready to print for each applica.on
• Automated Calcula>ons on Worksheets and
‐ Enables account oﬃcers to do CI/BI reports faster
• Integra>on of Audio Visual Presenta>ons
‐ Can be used for promo.onal / ﬁnancial literacy / cross‐selling
purposes (regulated and controlled presenta.ons)
Expected Beneﬁts in doing Credit Scoring
• Reduced Reliance on Credit CommiLees:
Inclusion of credit score component makes objec.ve assessment
of candidates based on speciﬁc characteris.cs. Reduces reliance
and .me spent by supervisors and credit commi=ees in reviewing
new loan applica.ons.
• Improved Approve/Deny Decisions:
Credit score model should help to increase the actual quality of
• Improved Produc>vity of Account Oﬃcers
By having a reliable Credit Scoring System, AO’s can concentrate
more on marke.ng, helping the bank to generate more clients.
• Gives a complete informa>on on who your clients are
All loan applica.ons are recorded on a database
Loan Process Flow
Ask and Validate
Conduct Interview using
Conduct Background Inves.ga.on and
Hand in Authoriza.on le=er and
Discuss the Required Documents
Market Other Bank
Inform the applicants that s/he could
re‐apply aSer 90 days.
Warning and Display Messages
Response options for fields that have dropdown options, type the
corresponding number of the answer and click “Enter”
Entered value is not in the given options or beyond the set values
Important field that should be filled in. Cannot proceed to the next field
unless the current field has been filled in.
Displays at the end of each form. Allows the AO/AS to review the
information before going to the next form.
Displays when AO/AS entered an applicant’s name that has been recorded
Displays at the end of the application. Need to press “F8” to save the
Warning message when AO/AS tries to enter a previously denied client
within less than 90 days.
Warning message in cash flow section if a field is left missing.
Feedbacks from AO’s
• Doing paper work is reduced
giving us more .me doing
• I‐rate helps us encourage
prospected clients to take up
loans, especially when they
get a lower interest rate.
• Clients are impressed with the
net books, a=rac.ng other
prospected clients for a trial.
• If the applica.on is denied,
clients are suspicious about
the correctness of the data
• It is hard to explain to client
why their applica.on is
• Risk of being robbed.
• Credit Scoring System cannot replace a skilled
and responsible Account Oﬃcer. The result of
a Loan Applica.on relies on the correctness
and truthfulness of the data being entered.
The system only helps in expedi.ng the loan
process and guides us with the level of risk
involved in lending to a par.cular kind of