Chapter 4: Other Financial Institutions

Question 1

Is a firm that provides funding or loans to individuals, enterprises, and other organizations.

Answer 1

Finance Companies

Question 2

make a profit from the interest rates they charge on their loans, which are normally higher than the interest rates that banks charge their clients.

Answer 2

Finance Companies

Question 3

It does not receive cash deposits from clients, nor does it provide some other services common to banks, such as checking accounts.

Answer 3

Finance Companies

Question 4

the fees charged for the use of borrowed money

Answer 4

Interest rates

Question 5

Regulates the Philippine securities sector, including financing business that issue securities or participate in other regulated activities.

Answer 5

Securities and Exchange Commission (SEC)

Question 6

a rural bank in the Philippines that provides financing and banking services to rural communities, including loans, deposits, and remittance services.

Answer 6

One Network Bank (ONB)

Question 7

a lending non-bank financial institutions in the Philippines, primarily known for its pawnshop service which also offers microfinance services.

Answer 7

Cebuana Lhullier Finance Corporation

Question 8

a financing company that provides consumer and business loans in the Philippines.

Answer 8

Radiowealth Finance Company Inc.

Question 9

It offers various loan products to meet the diverse financial needs of its clients.

Answer 9

Radiowealth Finance Company Inc.

Question 10

Functions: (Financing Companies)

Answer 10

• Provide loans with terms and help people afford big expenses.
• Make investments in businesses by providing capital for expansion or new venture.
• Provide assistance and support to help people in making good financial choices.

Question 11

Benefits: (Financing Companies)

Answer 11

• Individuals and businesses are allowed to acquire assets that can increase efficiency and productivity.
• Borrowers could save on interest costs by obtaining a Loan with cheaper interest rates considering the financial conditions.

Question 12

Products and Services Offering: (Financing Companies)

Answer 12

1. Business Loans
2. Consumer Loans
3. Mortgage Loans
4. Leasing Loans
5. Factoring Services
6. Investment Products

Question 13

Challenges in Operations: (Financing Companies)

Answer 13

• Must keep sufficient capital to find lending operations and control possible losses which can be difficult economic crises.
• Interest rate fluctuations can affect financing companies’ profitability and asset-liability management.

Question 14

Can a financing company lower its interest rate?

Answer 14

Yes

Question 15

• Assets on the warehouse but cannot be used.

Answer 15

Non Performing Loans

Question 16

Not easy to dispose (due to processing)

Answer 16

Non Performing Loans

Question 17

Often known as Credit Unions.

Answer 17

COOPERATIVE

Question 18

A form of business organization that is owned and run by its members for their mutual advantage.

Answer 18

COOPERATIVE

Question 19

May offer its members banking and credit services, such as savings accounts, loans, and insurance.

Answer 19

COOPERATIVE

Question 20

Overseas fostering cooperative growth and ensuring that cooperative groups follow all applicable rules and regulations.

Answer 20

Cooperative Development Authority (CDA)

Question 21

Functions: (Cooperatives)

Answer 21

• Through money pooling, coop. enables members to earn greater interest rates and gain savings faster.
• Create job opportunities by starting businesses or projects that require workers.
• Protect the rights and interest the members by pricing fairly, advocating for better regulations, and offering legal support when needed.

Question 22

Benefits: (Cooperatives)

Answer 22

• Members have an equal vote in cooperative decisions, regardless of how much money they have invested.
• Offer members the chance to acquire new skills, gain experience and assume leadership roles within the organization.

Question 23

Products and Services Offering: (Cooperatives)

Answer 23

1. Saving and Credit Facilities
2. Cooperative Loans
3. Financial Education
4. Training
5. Insurance and Risk Management Services

Question 24

Challenges in Operations: (Cooperatives)

Answer 24

• Must maintain financial viability, which calls for efficient resource management, income production, and cost minimization to enable continued —- and expansion.
• It requires excellent leadership and management to make strategic decisions, provide transparency, accountability and represent members.
• Often face challenges in raising funds for investment, development and meeting member’s financial signature.

Question 25

offers Savings Account & Time Deposits (SA & TD)

Answer 25

Cooperatives

Question 26

not authorized to offer Current Accounts (CA)

Answer 26

Cooperatives

Question 27

a microfinance-oriented cooperative in the Philippines that offers financial services, including savings and credit facilities, to micro-entrepreneurs and small business owners.

Answer 27

Alalay sa Kaunlaran, Inc. (ASKI)

Question 28

a well-established cooperative company in the Philippines, primarily serving the agricultural sector.

Answer 28

1st Valley Credit Cooperative (1VCC)

Question 29

a cooperative federation in the Philippines composed of thousands of cooperatives across various sectors that provides support to its member-cooperatives.

Answer 29

National Confederation of Cooperatives (NATCCO Network)

Question 30

Sometimes known as Thrift Institution

Answer 30

SAVINGS AND LOANS ASSOCIATION

Question 31

Is a financial institution that specializes in accepting savings deposits and providing mortgage loans to individuals and businesses.

Answer 31

SAVINGS AND LOANS ASSOCIATION

Question 32

Supervises and regulates all banks and non-banks financial institutions in the Philippines, including savings and loan organizations.

Answer 32

Bangko Sentral ng Pilipinas (BSP)

Question 33

Functions: (S&L Association)

Answer 33

* Extend credit to members for various purposes which helps members access affordable financing to meet their financial needs. * Help people save money by providing a safe place to deposit their earnings and earn some extra money through interest. * Supports community projects like building houses and helps small businesses grow which creates jobs.

Question 34

Benefits: (S&L Association)

Answer 34

* Members can borrow money from at reasonable rates without paying high interest rates fees. * By depositing money in SLAs, members can earn more investment on their savings compared to regular bank accounts. * Members have a say on how the SLA operates and can vote on important decisions.

Question 35

a government-owned and controlled corporation in the Philippines that provides affordable housing loans and other financial services to its members.

Answer 35

Pag-IBIG Fund or Home Development Mutual Fund (HDMF)

Question 36

a thrift bank owned by the ________________________ catering primarily to government employees and their families.

Answer 36

Government Service Insurance System (GSIS), Family Bank

Question 37

a thrift bank that provides banking services to retail and corporate clients in the Philippines.

Answer 37

Sterling Bank of Asia

Question 38

Products and Services Offering: (S&L Association)

Answer 38

1. Saving Account 2. Mortgage Loans 3. Investment Products 4. Insurance Products 5. Personal Loans

Question 39

Challenges in Operations: Savings and Loan Associations

Answer 39

- Requires management of various regulatory restrictions set by central banks and cooperative authorities in order to be legally compliant and avoid charges. - Competition from traditional banks, non-bank financial institutions, and expanding financial tech companies Affected by macroeconomic variables including inflation and interest rates, requiring risk management techniques and adaptation