UNIVERSITY OF SAN CARLOS

SCHOOL OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTANCY

CREDIT GUARANTEE PRACTICES OF CREDIT PROVIDERS IN METRO CEBU

An Undergraduate Thesis Proposal
Presented to the
Faculty of the Department of Accountancy
School of Business and Economics
University of San Carlos
Cebu City, Philippines
In Partial Fulfillment
of the Requirements for the Degree
Bachelor of Science in Accounting Technology

Ares, Louise Virginia B.

Caada, Cherylene H.
Solmayor, Von Aldreck E.
Surigao, Mark Bonie J.
October 2016

APPROVAL SHEET

The undergraduate thesis proposal entitled CREDIT UARANTEE PRACTICES OF

CREDIT PROVIDERS IN METRO CEBU prepared and submitted by LOUISE VIRGINIA B.
ARES, CAADA H. CERYLENE, VON ALDRECK E. SOLMAYOR, and MARK BONIE J.
SURIGAO in partial fulfillment of the requirement for the degree in BACHELOR OF SCIENCE
IN ACCOUNTANCING TECHNOLOGY has been examined and is recommended for
acceptance and approval for ORAL EXAMINATION.

Undergraduate Thesis Committee

Challoner Allego Matero, CPA, CIA, DPA

Adviser

Eleanor D. Paclijan,CPA,MSA
Member

Marites A. Khanser, DBA

Member

Mr. Ritchie Tejana, CPA

Member

TABLE OF CONTENTS

Cover Page ... .

i
Approval
........ii

Sheet

Acknowledgement ..........iii
Table of Contents.................iv
Lists of Tables ..........x
List
of
..xi

Figures

....

Chapter 1: Introduction.............
1
Rationale...2
Statement
..4
Significance
..4

of

the
of

the

Problem

....

Study

....

Scope and Limitations ..............5

Definition of Terms ......6
Organization of the Study.....7

Chapter 2: Theoretical Background..................8

Review of Related Literature.....
8
Credit
.................10

Guarantee

Scheme...

Credit Guarantee Scheme Providers ...

10
Credit Guarantee Scheme Practices ....
....12
Eligibility...........12
Risk Sharing.......13
Guarantee Fees...............13
Operation of the Schemes......15
Constraints in Implementing CGS .....17
Current

Framework

in

CGS

....

....18
Theoretical Framework ..20
Funded Approach ...........20
Unfunded Approach ...............20
Individual Approach .......20
Portfolio Approach .........22
Enterprise-oriented Approach ........23
Institution-oriented Approach ........23
Ex-ante

guarantee

approach

......

Ex-post

guarantee

approach

..

..24
..24
Mutual guarantee approach ........25
Each approach has its advantages and limits .....
..26
Conceptual Framework ......28

Chapter 3: Research Methodology..................29

Research Environment........29
Research Respondents ...30
Sampling Method and Sample Selection .....
...30
Research Instruments..31
Questionnaires.....31
Profiles
of
Credit
..........................31
Credit
........31

Guarantee

Practices

Guarantee.

Constraints .32
Interview 32
Research Procedures.......32
Data collection .......
32
Data Analysis..........32

Bibliography..33
Appendices.36
Curriculum
Vitae
..37

LIST OF TABLES
Table
1

Title

Page

Credit Surety Fund Loans Comparative Summary....17

LIST OF FIGURES
Figure
1
2
3

Title

Page

Credit Guarantee Scheme, Japan.......16

Theoretical Framework .............27
Conceptual Framework .............................................................................................28