Course Title: CREDIT AND COLLECTION

Course Code: P23O6

Term: 1st Semester, SY 2021-2022

Faculty: CENITH GONZALES BUENAFLOR, MBA

OVERVIEW:
Nature of Credit
➢Generally, credit rest on the
confidence of one in the debtor’s
ability to pay on the future.
➢It is possessed by anybody in
varying degrees.
OVERVIEW:
Nature of Credit
➢Therefore, it is capable of being appraised
and recognized but cannot be given
away.
➢The lender may accept or reject the
credit depending upon who the borrower
is.
OVERVIEW:
Nature of Credit
➢Credit then passes from the debtor to the
creditor.
➢These are the persons involved in any
credit transaction.
➢Credit and debt are thus simultaneously
created and destroyed.
OVERVIEW:
Nature of Credit
➢When credit is accepted an obligation is
created; when debt is paid credit is
extinguished.
➢This relationship may be portrayed as the
two sides of coin; the obverse represents
credit and the reverse represents debt.
OVERVIEW:
Importance of Understanding the Credit
System
➢The reason behind credit usage is the
need or desire of individuals or businesses
to acquire economic goods, services, or
money in anticipation of their ability to
pay.
OVERVIEW:
Importance of Understanding the Credit
System
➢The users of credit are as varied as their
use for it.
➢Thus there occurs a chain of two-party
credit transactions.
➢This is due to the fact that credit financing
bridges the gap among its users for
temporary or long-term financial needs.