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Source of Credit

1. Individual money lenders, retail stores like sari-sari stores, and pawnshops are common sources of credit for individuals in need in the Philippines. Commercial banks create credit by lending deposits and purchasing securities. Savings banks and rural banks also provide loans using accumulated deposits. 2. Government agencies provide additional credit options, such as Kilusang Kabuhayan at Kaunlaran for productive development and PAG-IBIG to boost housing. Department store cards or gas cards can help build credit when standard bank cards are unavailable. 3. Maintaining a good credit rating involves establishing a good payment history with lenders. Warning signs of credit abuse include delinquent payments, default notices,

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906 views

Source of Credit

1. Individual money lenders, retail stores like sari-sari stores, and pawnshops are common sources of credit for individuals in need in the Philippines. Commercial banks create credit by lending deposits and purchasing securities. Savings banks and rural banks also provide loans using accumulated deposits. 2. Government agencies provide additional credit options, such as Kilusang Kabuhayan at Kaunlaran for productive development and PAG-IBIG to boost housing. Department store cards or gas cards can help build credit when standard bank cards are unavailable. 3. Maintaining a good credit rating involves establishing a good payment history with lenders. Warning signs of credit abuse include delinquent payments, default notices,

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khaireyah hashim
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© © All Rights Reserved
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Source of Credit:

1. Individual Money Lenders


- May lend his surplus to those in need so that it will bring some income to him.
- Seeks to earn above average rates of return on their money.
- Risk is that the private money loan may not be paid on time or not at all without legal
action.

2. Retail Stores
- Biggest source of merchandise credit in the Philippines.
- Known as “Sari-Sari Store”
o Caters everyday needs of the consumers.

3. Pawnshops
- Oldest credit institution in China and Philippines.
- The amount a pawnshop is willing to lend is based primarily on the value of the item, but it
can also substantially affected by the pawnshop’s primary inventory at the time of the loan.
- Makes loan at substantially higher interest rates than the banks typically charge for personal
loans.

4. Commercial Banks (Credit Money)


- Create credit by advancing loans and purchasing securities.
- They lend money to individuals and business out of deposits accepted from the public.
- They keep the required amount of services and lend the remaining portion of public
deposits.

5. Savings Bank
- Since savings banks accumulate the small savings of depositors, such accumulated funds are
in turn invested in bonds or in loans secured by bonds, real estate mortgages, and other
forms of security.

6. Rural Banks
- Provide the chief source of credit especially for those engaged in agriculture that needs
these facilities badly.

13. Other Government Agency

 Kilusang Kabuhayan at Kaunlaran


- Intended to involve the whole citizenry and calls for the mobilization of the people to direct
their creative energies and resources towards productive participation in development.
 Industrial Guarantee Loan Fund
 PAG – IBIG
- Intended to boost housing development in the country.
How to Establish Credit

 Department Store or Gas Credit Card


- if you can’t get a standard bank-issued credit card, you may find it easier to get a
department store credit card or gas cards for buying gasoline, since those usually come with
more lenient approval requirements.

How to maintain a good credit rating

 Establish a good credit history


- There is something that we call credit scores which demonstrate your history of paying your
debts to entities that loan you money. And when you have a good credit score you can use it
for getting another credit card or loan.

Warning Signs of Credit Abuse

 Delinquent Payments
- Occurs when an individual/corporation with a contractual obligation to make payments
against a debt (such as loan payments/interest on a bond) doesn’t make those payments on
time or in a regular, timely manner.
 Default Notices
- Formal letter sent to you by a creditor as a result of payments missed on a credit agreement
between yourself and a credit provider (Credit Card and Loan Companies).
 Repossession
- Reclaiming ownership of something that has not been paid off but still has value.
 Collection Agencies
- A company used by lenders or creditors to recover funds that are past due or from accounts
that are in default.
 Judgment Lien
- Court ruling that gives a creditor the right to take possession of a debtor’s property if the
debtors fails to fulfill his/her contractual obligations.
 Garnishment
- A legal procedure in which a person’s earnings are required by court order to be withheld by
an employer for the payment of a debt such as child support.

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