Definition : credit is money or bill application or similar forms, base assent or deal borrows to borrow among bank with clients, the borrower takes responsibility.

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Presentation transcript:

Definition : credit is money or bill application or similar forms, base assent or deal borrows to borrow among bank with clients, the borrower takes responsibility to pay due the given time period along with interest (UU No. 10/1988)

Element Subject Economic value the economic values of goods or fund that changing hands from the first party to other party Trust the lender confidential that approved credit will be accepted proximately

Time a period or a given time period restricting among credit and it redemption Reward reward or interest on credit application

Risk the effect emerges from the beginning of approved credit until redemption such as the effort risk, geographical risk, inflation risk, politics risk etc.

Important Terminologies Plafon/Credit Quota maximal bounds of credit that approved by bank, utilized by debtor Unused Plafon credit value has not be used by debtor

Outstanding Credit position of total credit has already be used by debtor at the time Loan Collectability unsecured quality classification based on particular criterion according to BI rule

Before application of credit is accomplished, bank has to appraise : Character Capacity Capital Collateral Condition

that is done by bank to analyse application of credit, are : Character Approach Replayment Approach Collateral Approach Feasibility Approach Development Approach

Credit Application Process

General Type of Credit can be classified based on: The effect of purpose : 1.Productive /Commercial Credit fund requirement as an effort that gives value addition, obtains profit, or carries out activities: - Trading -Production/Exploitation -Investation/Exploration

2.Consumptive Credit utilized to fund consumption requirement for example : buying private car, buying private house

According to Duration 1.Short-term Credit loan with maximum duration 1 (one) year 2.Long-term Credit loan with duration more than 1 (one) year

According to way to thawed credit 1.Afbetaling Credit 2.Revolving Credit 3.Contingency Financing

Interest Count 1.With annuity M: Credit quota n: Duration i: Interest/month

2.Flat installment (loan with fixed installments ) i = effective interest/month n= duration