Here one can easily get confused with the word pillar being used for the financial industry. Basically financial industry is like a skyscraper building that needs support to stand still and work efficiently. The financial industry has many facets that require different specializations to work. But here, we are discussing financial industry in terms of Banks/ NBFC’s etc. the major segments or pillars of this industry includes the Sales, Credit & Risk, operations and collections or recoveries.
The word Credit is derived from a Latin word (he/she/it believes). In simple words, credit means the trust that allows one party to provide money or any other resource to another party. The functioning of credit department includes the consistent application of company’s credit policy, the assessment of the credit worthiness of the potential customers and to review the credit reports of the existing customers. It is done on a regular basis to reduce the risk and improve the revenues of the Bank/ NBFC.
Credit Manager is also referred as Loan Officer who works for Banks/ NBFC and other financial organizations with an objective to recommend and approve the loan applications. Though the loan officers are the employees of financial institutions but still they work as a mediator between creditors (lenders) and the borrowers. Once the loan is applied, the application is organized by the loan processor (sales professional) and sent to an underwriter (credit team) who investigates, evaluates & determine if the applicant qualifies for the loan or not.
The role of a loan officer requires a minimum qualification as a graduate or a related experience in the field of lending. The loan officer has to assist the customers with their loan applications related to home, mortgage or business. At times they have to travel and meet the clients and visit their business or residence place. This requires them to be presentable along with good communication skills. Their intra-personal skills, decision making skills, policy and procedures of the financial institution and knowledge of mortgage and other types of secured loans make them a qualified professional.
Job Duties of a “Loan Officer”
- Though there are specified limits to approve loans but he can refer the loan applications outside those limits for approval to management.
- Meet with applicants to gather information regarding the loan applications and to guide the customer about the process.
- He is responsible to analyze the financial status of the applicant, credit history and evaluate the property to judge the feasibility of granting funds.
- To explain to customers about the different options available with the bank/NBFC and the different types of loans as well as the terms and conditions of those services.
- Compile the copies of financial statements, loan applicants’ credit histories and other related information.
- Review and update credit report and loan files. (Know more about Credit Score)
- Review the loan papers and ensure that they are complete and accurate as per the Bank’s/NBFC policy.
- Computation of payment schedules is also one of the attribute of the job description of the loan officer.
- A loan officer has to stay updated about new types of loans and other financial products and services to meet customers’ needs.
- He is responsible to submit the applications to credit analysts for verification and further recommendation.
- He also has to handle the customer complaints and take appropriate action to resolve them.
- He needs to work out with the clients to identify their financial goals and find ways of reaching those goals.
- He has to work as a team with the underwriters with the aim to resolve mortgage application problems.
- He is responsible to negotiate the payment arrangements with customers who have turned their loan accounts as NPA.
- Along with the sales professional, the loan officer indirectly sells the bank products to individuals and firms, promoting bank services that may meet customers’ needs.
- Supervise loan personnel.
- He has to set credit lines, credit policies, procedures and standards in conjunction with senior managers and ensure that the team of underwriters also follows the same.
- He along with the sales professional team has to develop a referral network, analyze the potential loan market to locate potential prospects for loans.
- The loan officer has to prepare the reports to be sent to customers with delinquent accounts and forward irreconcilable accounts for further collection action.
- Arrange for maintenance and liquidation of delinquent properties.
- Interview, hire, and train new employees to increase the team and work more efficiently.
- Petition courts to transfer titles and deeds of collateral to banks.