Podcast
Questions and Answers
Which indicator is NOT used to assess character in the risk analysis process?
Which indicator is NOT used to assess character in the risk analysis process?
What should the Account Officer consider when determining the maximum loan entitlement?
What should the Account Officer consider when determining the maximum loan entitlement?
Which group is NOT typically consulted during the character/risk analysis?
Which group is NOT typically consulted during the character/risk analysis?
What happens if the applicant does not meet the minimum loan criteria during the CI/BI process?
What happens if the applicant does not meet the minimum loan criteria during the CI/BI process?
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Which aspect is NOT addressed during the Cash Flow Analysis?
Which aspect is NOT addressed during the Cash Flow Analysis?
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What is the primary function of the Credit Information Corporation (CIC)?
What is the primary function of the Credit Information Corporation (CIC)?
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Which law established the Credit Information Corporation (CIC)?
Which law established the Credit Information Corporation (CIC)?
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Who supervises the operations of the Credit Information Corporation?
Who supervises the operations of the Credit Information Corporation?
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What percentage of shares does the government own in the Credit Information Corporation?
What percentage of shares does the government own in the Credit Information Corporation?
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Which of the following associations does NOT own shares in the CIC?
Which of the following associations does NOT own shares in the CIC?
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Why are credit registries developed, according to the World Bank?
Why are credit registries developed, according to the World Bank?
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What kind of data does the CIC collect from financial institutions?
What kind of data does the CIC collect from financial institutions?
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What threshold requirement is often associated with loans registered in national credit registries?
What threshold requirement is often associated with loans registered in national credit registries?
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What role does a credit registry primarily serve in financial transactions?
What role does a credit registry primarily serve in financial transactions?
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What is the primary purpose of conducting a CIBI?
What is the primary purpose of conducting a CIBI?
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Which step in the CIBI process comes first?
Which step in the CIBI process comes first?
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What can result from a poorly conducted CIBI?
What can result from a poorly conducted CIBI?
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Which information does a credit registry typically track?
Which information does a credit registry typically track?
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What aspect does CIBI assess regarding the applicant?
What aspect does CIBI assess regarding the applicant?
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What is a major consequence of loan delinquency for banks?
What is a major consequence of loan delinquency for banks?
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How does a credit registry benefit individuals?
How does a credit registry benefit individuals?
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Study Notes
Credit Information Corporation (CIC)
- Established by the Republic Act No. 9510 (Credit Information System Act, CISA)
- Acts as a central credit registry in the Philippines
- Collects and provides standardized credit information on borrowers
- Supervised by the Governance Commission for GOCCs (GCG)
Purpose of a Credit Registry
- Monitors loan transactions by individuals and financial institutions
- Supports the state in supervising financial institutions
- Requires registration of loans above a certain amount in the national credit registry
Importance of Credit Information and Background Investigation (CIBI)
- Prevents loan delinquency and ensures profits
- Protects lenders from losses due to non-collection of installments and loan defaults
- Helps determine the character, reputation, and repayment capacity of loan applicants
Steps Involved in a CIBI
- Loan Application: Account Officer (AO) interviews applicant, assesses eligibility based on bank criteria
- Character/Risk Analysis: AO gathers information from references to assess character and reputation using indicators like stability, entrepreneurship, reputation, and repayment behavior
- Repayment Capacity Analysis: AO uses Cash Flow Analysis to determine the applicant’s maximum loan entitlement considering their ability to repay
- Prepare/Finalize CIBI Report: AO summarizes findings and recommendations based on the analysis of loan application, character and risk assessment, and repayment capacity
Components of a CIBI Report
- Applicant’s character and reputation assessed through interviews with references
- Applicant’s repayment capacity is analyzed using a Cash Flow Analysis
- The final report includes findings and recommendations regarding the applicant’s suitability for a loan
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Description
This quiz covers the establishment and purpose of the Credit Information Corporation (CIC) in the Philippines, as mandated by the Credit Information System Act. It explores the importance of credit information and background investigations in preventing loan defaults and aiding financial institutions. Test your knowledge on the regulations and processes involved in the credit registry.
