Areas of Consideration:
With regards to Insular Bank of the Philippines’ problem, significant information were take into account for the solution of the unsolved question.
The areas to be considered are the following:
• Mr. Dennis Berino, Loans Division head of the Insular Bank of the Philippines, looked over the credit evaluation report of APEX Industries, a local distillery company for recommendation to the Loans Review Committee. • Insular Bank of the Philippines Credit Scoring System was initiated in a project headed by Mr. Berino and introduced only last year. A number of officers had doubts as to its reliability and accuracy. In fact, they already had one bad experience with a company which was given a high credit score but later had problems with its payments. • Mr. Berino designed a credit scoring model with formula for evaluating loan applications. He envisioned a system which would serve as a quick first step in the grading and ranking of potential corporate barrowers. • When the credit scoring system was introduced, it was received with mix reactions. Some officers felt that the credit scoring system would speed up the processing of loan applications. They claimed that the credit score would serve as quick first step to the grade marking of potential barrowers. • Mr. Berino then submitted APEX Industries’ credit evaluation report to the Loans Review Committee for final approval. However Mr. Jovito Tuazon, head of Loans Review Committee and one of the more outspoken critics of the credit scoring system expressed his doubts over Mr. Berino’s recommendation. He felt that the credit scoring system tended to be biased in favor of industries with higher turnover than others. He cited General Drugs which was given a high credit score but later had problems with its payments. • Mr. Berino reflected on the over-all effectiveness of the credit scoring system. He knew that this issue could become the focus questions by...
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