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    Classification and Sources of Credit

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    geofrey gepitulan
    The document discusses the classification and sources of credit. It is important to classify credit to guide those who need credit and providers of credit. Credit is classified by purpose, such as agricultural, commercial, industrial, and consumer credit. Financial intermediaries such as banks help facilitate financial transactions between diverse parties. Specific sources of short, medium, and long-term credit for businesses are also outlined.

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    Classification and Sources of Credit

    Uploaded by

    geofrey gepitulan
    500 views8 pages
    The document discusses the classification and sources of credit. It is important to classify credit to guide those who need credit and providers of credit. Credit is classified by purpose, such as agricultural, commercial, industrial, and consumer credit. Financial intermediaries such as banks help facilitate financial transactions between diverse parties. Specific sources of short, medium, and long-term credit for businesses are also outlined.

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    The document discusses the classification and sources of credit. It is important to classify credit to guide those who need credit and providers of credit. Credit is classified by purpose, such as agricultural, commercial, industrial, and consumer credit. Financial intermediaries such as banks help facilitate financial transactions between diverse parties. Specific sources of short, medium, and long-term credit for businesses are also outlined.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    500 views8 pages

    Classification and Sources of Credit

    Uploaded by

    geofrey gepitulan
    The document discusses the classification and sources of credit. It is important to classify credit to guide those who need credit and providers of credit. Credit is classified by purpose, such as agricultural, commercial, industrial, and consumer credit. Financial intermediaries such as banks help facilitate financial transactions between diverse parties. Specific sources of short, medium, and long-term credit for businesses are also outlined.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 8

    CHAPTER 4

    CLASSIFICATION AND
    SOURCES OF CREDIT
    THERE ARE TWO IMPORTANT
    PURPOSES IN THE CLASSIFICATION
    OF CREDIT.

     FIRST, AS QUICK AS TO GUIDE TO THOSE WHO NEED


    THEM, AS TO WHERE AND HOW TO GET THEM

     SECOND, TO GUIDE THOSE WHO PROVIDE


    THEM AS TO WHERE TO FIND THESE USERS
    OF FUNDS (SEGMENT MARKETING
    Credit is generally classified
    according to purpose from where the
    loan funds are intended to be used:

     AGRICULTURAL CREDIT
     TIME LOAN
     CROP LOAN
     COMMODITY OR QUEDAN LOANS

     COMMERCIAL CREDIT
     INDUSTRIAL CREDIT
     CONSUMER CREDIT
     COMMODITY LOANS
    FINANCIAL INTERMEDIARIES

     IS AN INSTITUTION OR INDIVIDUAL THAT


    SERVES AS A MIDDLEMAN AMONG DIVERSE
    PARTIES IN ORDER TO FACILITATE
    FINANCIAL TRANSACTIONS.

     IT IS EITHER INTERMEDIARIES OR NON-


    INTERMEDIARIES
    EXAMPLES OF FINANCIAL
    INTERMEDIARIES
     BANKS
     COMMERCIAL  SAVINGS BANK  RURAL BANK
     INSURANCE COMPANIES
     PRE-NEED COMPANIES
     PENTION/RETIREMENT FUNDS
     SSS  GSIS  RSBS  PRIVATE PENTION FUNDS
     INVESTMENT BANKS, LEGALLY REQUIRED NOT TO USE
    THE WORK “BANK” AND ARE KNOWN AS INVESTMENT
    HOUSES
     FINANCING COMPANIES
     CREDIT COOPERATIVE
    NON-FI SOURCES OF CREDIT

     APPLIANCES COMPANIES/CAR DEALERS


     PAWNSHOPS
     LENDING INVESTORS
     EMPLOYERS
     DEPARTMENT STORES
    SPECIFIC TYPES OF CREDIT
    AVAILABLE FOR BUSINESS
     SHORT (1 YEAR OR LESS) AND MEDIUM-TERM (1 TO 5 YEARS)
    PROVIDERS TERMS USED FREQUENT USERS
    1. Suppliers of raw materials & finished Supplier's Credit Manufacturing,
    goods merchandise Mercantile Credit wholesalers, retailers
    2. Comercial Bank a) Lines of credit All businesses
    (Universal Bank) b) Revolving credit Agreements
    c) Letters of credit and trust
    receipts for LC/TR)
    d) Packing credit advances)
    3. Large corporation with Commercial Paper Large companies with
    seasonal excess cash seasonal cash deficits
    4. Finance Companies a) pledge of accounts Appliances cos.
    receivables (a loan) Wholesalers and
    manufacturers
    b. factoring (sales of -same as above-
    receivables
    5. Individual & Corporations a) Treasury bills Government
    Finance companies b) Repurchase Finance Companies
    agreements
    SPECIFIC TYPES OF CREDIT
    AVAILABLE FOR BUSINESS
     LONG-TERM OVER 5 YEARS

    PROVIDERS TERMS USED FREQUENT USERS


    1. Pention Funds, insurance co.s Treasury Funds Government
    2. Corporations and individuals Corporate Bonds Large Corporations
    pension funds, insurance cos.
    3. Commercial Banks Investment or Manufacturers
    Wealthy Individuals Industrial credit Wholesaler
    Pensions Funds, insurance building factory
    companies and equipment loans
    Bonds
    4. Finance Companies Equipment leaseback Manufacturers

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