SWOT Analysis

Threats:

1. The debtors prefer the faster application of loan.

2. The competitors tend to upgrade their systems in to more

efficient functions.
3. Competitors in the same industry provide same kind of service

having lower interest rate applied.

4. Competitors in the same industry provide same kind of service

offer lower service charge.

5. Inflation. It may affect the present interest rate. It may

decrease or increase the income from lending activities.

6. The government requirements can affect the lending operation.

Some requirements can delay the process of applying loan

because the debtors cant provide the necessary requirements

immediately such as NBI clearance.

7.

Weakness:

1. It is time consuming and costly to apply for a loan. Since they

dont have a computer program/system, the process takes a

longer period of time. Compare to a computerized process, the

manual process involves more employees. Since they currently

 use a manual process, they have to ask for the authorization

from the Board of Directors if the loan exceeds 100,000.00

otherwise, the credit department will authorize the transaction.

2. Computerized system can program a command wherein can

limit the credit/loan in a specified amount, by which can be

used to check whether the creditor still have an

outstanding/unpaid balance or not.

3. Inherent risk. Since they use manual process of computing

interest, the bookkeeper can commit error in the computation of

interest due to the different kinds of loan granted to the

debtors, different charges for every type of loan and different

interest rate being applied in a certain type of loan.

4.

Strength:

1. If the storekeeper is not around, the other officer can take over

the task temporarily (e.g. the other officer can issue or accept

application form).
2. They check the credit background of the debtor personally.
3. Transparency. The ledger and other files can be checked by the

members in office hours.

4. Since they use manual process in the revenue collection, the

internal control is effective because there are source documents

 and different people are involved in the process so there is a

segregation of duties for the authorization, recording and

custody of cash.
5. They conduct a general board meeting once a year.
6. They secure the loan being granted to the debtors through

collateral.
7. They minimize the doubtful accounts by limiting the loan being

granted to the debtors who are not paying on time.

8. The storekeeper keeps the files and important documents in a

volt wherein authorized persons only can access it.

9. It is easier to gather evidence on audit because there are source

documents such as receipts and vouchers.

10. The debtors who defaulted their accounts are not allowed to

apply for another loan anymore.

11. Power interruption doesnt affect the operation of the entity.
12.

Opportunity:

1.
2.
3.