Quantcast
Latest Stories

Banking on your character

By

Antonio C. Moncupa Jr.

So you want to borrow from the bank.  You have thought hard about it and figured that debt capital is the only missing link for you to be the next version of the Filipino taipan, given your fantastic business idea that could change the way people live.

Or maybe, you have enough earnings to buy your dream house or a better car and pay for it comfortably from the savings from rent and taxi fare, and from current savings from your regular source of income.

Rather than wait to save all the money you need, you want your family to enjoy better amenities that you know you could afford.  After all, that is why you are working.  Fair enough.

The next step is to get the banks to grant you a loan.  Many people find that dealing with bankers is like dealing with bureaucrats; it is not exactly their idea of a good day. But you have psychologically prepared yourself for that, too.

Just like you and everybody else

Bankers don’t bite.  They are just like you and your friends.  Some though just want to speak in English and wear nice clothes that at times make them look unapproachable.  But really, they are just like everybody else.

Their experience, their training, and the environment they operate in shape their values and behaviors.  Just like other human beings, their personal behavior is influenced by their unique circumstance.

However, just like many of us, their professional or business behaviors is mostly predictable. The latter is what you are interested in to get that loan.

To get that loan, it will help to understand bankers’ motivation, their fears and aspirations as business people.

If you are or your parents or some close relatives are Mr./Ms. Big Shots, well-established, and with solid track record, bankers will probably run after you.  But if you are the struggling entrepreneur or just moving up in your career, somehow it feels that they are not interested.

Bankers are first and foremost business people.  Since they are professional employees, their advancement is determined by how they perform in their business. If they are in lending, they surely want to lend, as that is the only way to move up the career mountain.

The bigger loans and more borrowers they handle, the more important they think of themselves and the more they feel that higher pay, perks, and bonuses are their birthright.

Except, that they want to get paid too, just like you when you want to collect payment when you sell your goods and services.

They like sticking to the big shots and those more likely to pay their debts just as you would want customers and clients who are sure to pay what they bought from you.  They are making sure that they will do good business.  After all, their failure to collect from those they lent money to is a sure route away from higher pay, perks, and bonuses.

Character – your willingness to pay

The key is to convince your banker that you are good business.  Ponder the things bankers consider in granting credit.

We can group these into two major considerations—your willingness and your capacity to pay.  Today, we discuss willingness.  In future issues, we will tackle capacity.

Bankers refer to a borrower’s willingness to pay as character.  This is probably the more important consideration when getting a loan.  We all have experiences involving people who have the means to pay but would not do so.

In the last great credit crisis in the late 1990s, we have seen really big shots finding ways to escape paying their debts even if they could afford to pay.  Once bitten, twice shy, as they say and so bankers are just being vigilant.

Since they don’t know you, they will look for indications of whether or not you are the type to honor your commitments.  If you have a track record of bad credit, like an unpaid credit card, or past due personal loan, or any indebtedness you failed to honor, you are a candidate to be sent to the virtual credit exile colony.

Even if you just happened to be a really nice friend and signed as a co-maker to a friend’s loan, you will likely be judged badly if your friend failed to honor the debt and you failed to honor your signature.

Banks would not also want to lend to someone involved in litigations, especially if it is about debts, or honoring commitments.  If you are an accused in a crime, your banker will not tell you, but will likely start to stay away from you.  They will always be busy when you call but will be very polite if you catch them. If you could read their thought bubble, you will see ‘if you could possibly do a crime, what more the small oversight of not paying debts’.

And banks do court checkings to see if their borrowers are involved in some litigation.  Remember, they don’t know you.

In the absence of full information, they will play it safe. If you are the litigious type, they will presume that you would not think twice about hauling them to court.  This time, practice does not make perfect and is actually detrimental.

Banks will also be wary of people with credit-unfriendly vices like gambling.  While some banks are willing to finance casinos, they would not want their customers contributing to the casinos’ profits. Especially if it is the money they lent that increases the casino’s capability to pay back their debts.

Banks have long memories.  The records of those with history of unpaid past due debts are stored in some credit bureau for years.  It will require a lot of effort to overcome a past of credit transgressions.

Those thinking of borrowing must always watch their credit record and anything that may be interpreted as bad payment behavior.

Maybe you can look at it positively. This character thing, which banks look into, contributes toward the making of a better society, even if that is not the original intent.

*****

Tony Moncupa, Jr. is the President and CEO of East West Banking Corp.  Please e-mail your questions, comments, suggestions to easttowest.inquirer@gmail.com.

These articles are posted in EastWest’s Facebook and Twitter accounts.  Please follow us at www.twitter.com/eastwestbanker and like www.facebook.com/eastwestbanker.


Follow Us


Follow us on Facebook Follow on Twitter Follow on Twitter


Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Banking , Credit , Finance , Loan

  • UrHONOR

    OK yan….basta’t willing magbayad, kahit walang pangbayad, pa-uutangin ka!



Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement
  1. Are your favorite malls open this Holy Week break?
  2. ‘Labahita a la bacalao’
  3. This is not just a farm
  4. Why is the lifestyle set now afraid to wear jewelry–before Kim Henares?
  5. Clams and garlic, softshell crab risotto–not your usual seafood fare for Holy Week
  6. Are your favorite malls open this Holy Week?
  7. Sarah Geronimo and Matteo Giudicelli sing ‘All of Me’–and we all swoon
  8. 12 other things you can do at Pico de Loro Cove
  9. Moist, extra-tender blueberry muffins
  10. The truffled mac ‘n’ cheese, eggs benedict, chicken leg confit are excellent
  1. Dominique–Gretchen and Tonyboy Cojuangco’s daughter–now an endorser
  2. Why is the lifestyle set now afraid to wear jewelry–before Kim Henares?
  3. Marcos grandson to wed beautiful Rocha scion
  4. France makes work beyond 6 p.m. illegal
  5. Sarah Geronimo and Matteo Giudicelli sing ‘All of Me’–and we all swoon
  6. South Koreans crave Asia’s smelliest fish
  7. How Vitamin B can be a remedy for ‘manhid’ and neuropathy
  8. Ever heard of HydroBob?
  9. 90 percent of Filipino households don’t practice proper toilet hygiene, sanitation
  10. Boots Anson-Roa to wed in Eddie Baddeo
  1. Mary Jean Lastimosa is new Miss Universe Philippines
  2. Did Angara ruin Pia Wurtzbach’s chances at Bb. Pilipinas?
  3. Dominique–Gretchen and Tonyboy Cojuangco’s daughter–now an endorser
  4. Manila in shock over model Helena Belmonte’s death
  5. Vinegar test helpful vs cervical cancer
  6. From Jeannie to mom of suicide victim
  7. San Vicente beaches hidden but not for long
  8. Borgy and Georgina are back; others are off–again
  9. Sen. Angara: I thought Pia Wurtzbach gave a good answer
  10. Ex-Givenchy model fights for ‘Yolanda’ survivors

News

  • Henares on Pacquiao bashing: I did not start this
  • Drilon, Nancy Binay urge Filipinos to strengthen faith
  • ‘Yolanda’ toll now at 6,300 – NDRRMC
  • ‘Mom, I love you,’ says text from student on sinking ferry
  • Moderate earthquake jolts southern Iran
  • Sports

  • Power Pinays smash India in Asian Women’s Club volleyball opener
  • PH youth boxers off to stumbling start in AIBA World tilt
  • Durant has 42, Thunder beat Pistons 112-111
  • Walker leads Bobcats over Bulls in OT, 91-86
  • Man City slips further out of title contention
  • Lifestyle

  • Pro visual artists, lensmen to judge Pagcor’s photo contest
  • ‘Labahita a la bacalao’
  • This is not just a farm
  • Clams and garlic, softshell crab risotto–not your usual seafood fare for Holy Week
  • Moist, extra-tender blueberry muffins
  • Entertainment

  • Will Arnett files for divorce from Amy Poehler
  • American rapper cuts own penis, jumps off building
  • Jay Z to bring Made in America music fest to LA
  • Why Lucky has not bought an engagement ring for Angel
  • Derek more private with new girlfriend
  • Business

  • Asia stocks fail to match Wall Street gains
  • Fired Yahoo exec gets $58M for 15 months of work
  • PH presses bid to keep rice import controls
  • PSEi continues to gain
  • Number of retrenched workers rose by 42% in ’13
  • Technology

  • Netizens seething in anger over Aquino ‘sacrifice’ message
  • Filipinos #PrayForSouthKorea
  • Taylor Swift tries video blogging, crashes into fan’s bridal shower
  • DOF: Tagaytay, QC best at handling funds
  • Smart phone apps and sites perfect for the Holy Week
  • Opinion

  • Editorial cartoon, April 17, 2014
  • A humbler Church
  • Deepest darkness
  • ‘Agnihotra’ for Earth’s health
  • It’s the Holy Week, time to think of others
  • Global Nation

  • Syria most dangerous country for journalists, PH 3rd—watchdog
  • Japan says visa-free entry still a plan
  • First Fil-Am elected to Sierra Madre, Calif. city council
  • UC Irvine cultural night to dramatize clash of values in immigrant family
  • Filipino sweets and info served at UC Berkeley Spring Fest
    Marketplace