Procedures For Loaning Operation

Main Features:

  1. All applications for loans are approved by the credit committee in accordance with the policies set by the board of directors, except when the applicant is a member of the credit committee in which case, it should be approved by the board of directors.
  2. A Loan Register Book is maintained by the credit committee to record all applications for loans received and actions taken by the committee.
  3. Individual Share Capital, Deposits and Loan Ledgers are reconciled monthly with the General Ledger control accounts.

Forms

  1. Loan Register Book (LRB)
  2. Application for Loan (AFL)
  3. Loan Note (LN)
  4. Member’s Account Verification Sheet (MAVS)

Person’s/Unit & Basic Responsibilities:

  1. Accounting Personnel
    Indicates the account balances on the MAVS and prepares CV based on the approved loan application and other supporting documents.
  2. Credit Committe/Board of Directorse
    Records application for loan in the Loan Registry Book (LRB).
  3. Loan Officer/Loan Clerk
    Receives the duly accomplished AFL from members, prepares MAVS for verification of account balances, prepares LN for approved AFL and submits to the accounting unit for the preparation of CV.

Detailed Procedures

Accounting for loaning operations

Persons/Unit Involved Procedures
Member/Borrower
  1. Secures copy of the Application for Loan (AFL)
  2. Submits the duly accomplished form to the loan clerk/loan officer together with all the necessary supporting documents.
Loan Clerk/Loan Officer
  1. Receives the duly accomplished AFL with all the necessary supporting documents.
  2. Prepares the Member’s Account Verification Sheet (MAVS) and forwards the same to the accounting unit for verification of the account balances of the member.
Accounting Personnel
  1. Receives MAVS and indicates the account balances with corresponding comments thereon.
  2. Forwards MAVS to the loan clerk/ loan officer after verification.
Loan Clerk/Loan Officer
  1. Receives the verified MAVS from the accounting unit.
  2. Pre-evaluates the verified MAVS.
  3. If qualified, forwards the duly accomplished forms of the member-borrower to the credit committee for approval. If not qualified to borrow, returns documents to member.
    Note: In case applicant is a member of the credit committee, forwards accomplished forms to the BOD for approval    .
Credit Committee/BOD
  1. Receives the duly accomplished application for loan with all the necessary documents.
  2. Records the application for loan in the Loan Registry Book (LRB).
  3. Based on loan application and credit policies, approves/disapproves application during credit committee meetings.
    Note: For special loan, evaluation report should also be considered.
  4. Notes down action taken on the application for loan and records in the LRB.
  5. Forwards the application for loan with all the supporting documents to loan clerk/loan officer.
Loan Clerk/Loan Officer
  1. Receives the approved/disapproved application for loan from the credit committee/BOD.
  2. For approved loan application, prepares Loan Note (LN) and requires member-borrower and co-maker to sign. If disapproved, returns documents to member-borrower.
  3. Forwards loan note with approved application and other supporting documents to the accounting unit for the preparation of CV.
Accounting Personnel
  1. Receives the loan note with the approved loan application and other supporting documents.
  2. Prepares cash voucher. (Follow disbursement procedures for payment).
Category: Loans

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Government of Laoag Employees Development Cooperative (GLEDCO)

Barangay 10 San Jose, City Hall, Laoag City 2900, Philippines