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UCU GS Research Journal
CREDIT MANAGEMENT SYSTEM OF RURAL BANK OF ROSARIO (LU), INC.
MARIEL M. DACIO

This study aimed to have a deeper and clearer understanding on the credit management
system of Rural Bank of Rosario (LU), Inc. Specifically, Problem Number 1 focused on reviewing
the existing credit management system as contained in the credit policies and procedures of
the bank. Problem Number 2 determined the gaps in the current credit management system of
the Rural Bank of Rosario (LU), Inc. by comparing them with the Bangko Sentral ng Pilipinas
standards. Lastly, Problem Number 3 dealt on the proposed intervention measure to improve the
current credit management system of the bank.
The following are the salient findings of this study: On the assessment of appropriate
credit policies and procedures in achieving the goals of the bank, it was established that the bank
has written policies and procedures on (a) credit underwriting process; (b) large exposures; (c)
extension of credit and other accommodations and guidelines for evaluation of risk assets; (d)
monitoring and administration of other credit accommodations to directors, officers, stockholders
and related interests (DOSRI); (e) asset quality review and classification, accurate reporting of
loan status and adequacy of allowance for losses; and (f) credit workout to ensure that long
outstanding past due loans are appropriately acted upon which include (1) collection of past due
loans, (2) foreclosure proceedings, and (3) writing off of accounts.
The following are the conclusions drawn from the findings of this study: The Rural
Bank of Rosario (LU), Inc. has institutionalized policies and procedures that govern its credit
management system. The identified gaps in the bank’s credit policies and procedures need to be
resolved in order to be fully compliant with the standards set by the Bangko Sentral ng Pilipinas
and thus improve service delivery to current and prospective clients. The proposed intervention
measures are viable remedies to the identified gaps in the bank’s credit policies and procedures.
The following recommendations are forwarded: The credit policies and procedures
of the Rural Bank of Rosario (LU), Inc. should also incorporate the ideas of the clients and
employees to become more competitive in the banking industry and realize its vision. In other
words, it is better for the bank to make its credit policies and procedures flexible to meet the
needs of its potential loan clients thereby improving its credit lending activities. Management
should add some additional guidelines on fake documents, monitoring of large exposures,
accommodations, evaluation of risk assets, allowance for losses and collection of past due loans
in order to solve the current problems and achieve the client trust and confidence. The bank
should adopt creative ways of loan processing and approval in order to satisfactorily meet the
demands of potential loan applicants and the required level of loan growth as it is the main
source of income for the banking industry.

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