Electronic data is different from real life
DLPublished: Jul 12, 2007 3:55 PM | Updated: Jan 29, 2008 6:21 PM
I used to be a loan officer in a financial institution back in the 70s. Those days, we did not have much of a electronic media when giving out loans so we do it manually by visiting our clients. For instance, when somebody wanted to buy a car, we would interview him to find out more about his financial background.
Sometimes a 'mee' seller can make more than RM500 a day! On the other hand, a corporate executive only earned about RM2,000 a month and back then, this was good money. Comparatively, the 'mee' seller has a higher disposable income. So I would approve the loan for him.
But today's loan approvals are different. The loan officers do not go out to visit customers unless you are Exxon or Shell - guys like them can tell bankers to go fly kites with their loans. Maybe due to global warming, the loan officers cannot leave their air-conditioned offices. To make their lives easier, they use electronic media like Ctos, FIS and other collating agencies to approve loans.
An executive earning a miserable RM3,500 (peanuts today) gets platinum credit cards, loans approve up to 10 years on their new BMW or Toyota Camry. Ten years down the road, unless he makes it big time, he ends up owning 15 credit cards owing RM200,000 plus interest. Most of them chose to be bankrupt.
On the other hand, the 'mee' seller consistently earns RM15,000-20,000 monthly, buys a house with cash, buys a second-hand Proton Waja with cash but when he goes to the bank for a motorcycle loan, they throw him out because he has no documents - income tax return forms, etc. The turnover in his personal savings account is just not enough.
Banks don't seem to see the whole picture. Why are is the non-performing loan rate now so high compared to the no-so electronic age some time back? Electronic data is different from real life. E-data can be fabricated while real life can not.
So make your bank officers work harder and realise the real live scene out on the streets and at least in the next few years, your debt margin becomes lower. Learn from the loan-sharks' approval method (but not the collection tactics) and you will be a better bank without running to the EPF, Petronas, Khazanah and all the so-called bank saviours with an SOS.
Doing the wrong things and keep on doing it will make you a real fool indeed.
Sometimes a 'mee' seller can make more than RM500 a day! On the other hand, a corporate executive only earned about RM2,000 a month and back then, this was good money. Comparatively, the 'mee' seller has a higher disposable income. So I would approve the loan for him.
But today's loan approvals are different. The loan officers do not go out to visit customers unless you are Exxon or Shell - guys like them can tell bankers to go fly kites with their loans. Maybe due to global warming, the loan officers cannot leave their air-conditioned offices. To make their lives easier, they use electronic media like Ctos, FIS and other collating agencies to approve loans.
An executive earning a miserable RM3,500 (peanuts today) gets platinum credit cards, loans approve up to 10 years on their new BMW or Toyota Camry. Ten years down the road, unless he makes it big time, he ends up owning 15 credit cards owing RM200,000 plus interest. Most of them chose to be bankrupt.
On the other hand, the 'mee' seller consistently earns RM15,000-20,000 monthly, buys a house with cash, buys a second-hand Proton Waja with cash but when he goes to the bank for a motorcycle loan, they throw him out because he has no documents - income tax return forms, etc. The turnover in his personal savings account is just not enough.
Banks don't seem to see the whole picture. Why are is the non-performing loan rate now so high compared to the no-so electronic age some time back? Electronic data is different from real life. E-data can be fabricated while real life can not.
So make your bank officers work harder and realise the real live scene out on the streets and at least in the next few years, your debt margin becomes lower. Learn from the loan-sharks' approval method (but not the collection tactics) and you will be a better bank without running to the EPF, Petronas, Khazanah and all the so-called bank saviours with an SOS.
Doing the wrong things and keep on doing it will make you a real fool indeed.
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