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Case Study
AFPSLAI MBEAB Extension Office
Instituting Improvement for an Upgraded Business Setting
By: Simplicio B Lumantas Jr & Sandra G Dofitas MBA-Ex11
SUMMARY
Who: AFPSLAI
Where: MBEAB, Lapulapu City
When: March 18, 2009
What: Turn out of customers in an extension office
PROBLEM/ISSUE
This case study is about the low turn-out of customers at the extension office of the Armed Forces and Police Savings and Loan Association (AFPSLAI) in Mactan Air Base, Lapu-lapu City.
KEY CHALLENGES
The study aims to identify the reasons behind the low turn-out of customers at AFPSLAI's extension office in Mactan Air Base, Lapu-lapu City.
To find ways to attract more customers to patronize AFPSLAI products in the area.
SCOPE
This study is limited only to the AFPSLAI extension office in Mactan Air Base, Lapu-lapu City and does not include other extension offices of AFPSLAI in the country.
INTRODUCTION
ABOUT AFPSLAI
A private, non-stock and non-profit savings and loan association established and registered with the Securities and Exchange Commission in 1972.
This P36.6 billion (at year-end 2007)
organization is supervised by the Bangko
Sentral ng Pilipinas.
ABOUT AFPSLAI
To date, there are 21 branches and 72 extension offices nationwide with more to be established in strategic locations to serve more than 408,800 members from the AFP, PNP, BJMP & BFP to include their retirees and respective dependents.
MISSION OF AFPSLAI
To promote the culture of savings and responsible borrowing among members and to make available to them at reasonable cost a wide range of products and services in order to uplift their economic well-being and improve their ability to serve the nation and society.
FACTS
FACTS
Since the establishment of the extension office in 2003, earnings in terms of loans have been minimal than projected.
There are apparent competitors in the area where it is located.
FACTS
Some other loan institutions in the area catering to the same customer base attract more customers than AFPSLAI.
This extension office is about a 30-minute ride away from the main branch in Cebu City
FACTS
Average number of approved loan application at the extension office is only about 25-30 per month, a very low number considering the large customer base in the area.
Average number of served customers for the overall transactions is 600 - 700 per month
Other loan institutions in the area offer full service to its customers.
FACTS
POTENTIAL MARKET IN THE AREA (the whole Mactan Island)-About 2500 personnel coming from the following:
PHILIPPINE AIR FORCE - 60%
PHILIPPINE NATIONAL POLICE – 13%
Retirees & Pensioners from the AFP AND THE PNP – 11%
PHILIPPINE NAVY – 7%
PHILIPPINE ARMY – 3%
BUREAU OF FIRE PROTECTION – 3%
BUREAU OF JAIL MGMT AND PENOLOGY – 2%
DEPENDENTS – 1%
SUMMARY OF FINDINGS
SUMMARY OF FINDINGS
The AFPSLAI extension office in Mactan offers very limited service to its customers as compared to other loan institutions in the area.
Limited office hours- only 4 hrs daily There are two personnel assigned in the
office to serve its clientele but one is currently detailed in the main branch.
SUMMARY OF FINDINGS
The office is sometimes left closed when no other employee is sent to takeover in the absence of the Mactan personnel
Tellering is only done every Wednesday. There is a limited amount allowed for
withdrawal and deposits of savings.
SUMMARY OF FINDINGS
Strict compliance of AFP Policy on Single Borrower’s Limit (SBL) and other requirements
The EO uses an off-line/stand-alone system for member’s data inquiry purposes only.
Loan applications are forwarded to the main office for approval and usually takes about 2 – 3 working days to be approved
SUMMARY OF FINDINGS
Customers opt to transact at the main branch due to the limitations of services in the extension office
Recommendations based on feedbacks from customers had been raised by the extension office personnel to management but were not taken into action
RECOMMENDATIONS
Offer more services to customers such as daily tellering.
Extension office should be on-line with its main offices in Manila and Cebu
Pre-processed loan application and its respective supporting documents be faxed to the main branch for approval & further deposit the loan proceeds to the borrower’s passbook/account
RECOMMENDATIONS
Additional officers to serve the clients. Offering of innovative products peculiar to the
customers in the area. Conduct of agressive marketing to customers
thru continuous information drive focusing on AFPSLAI's strength and wide range of products.
Provide a Civilian Field Rep (CFR) to follow-up the transactions gathered during the marketing drive
CONCLUSION
Customer satisfaction and convenience are the keys to capture the market in the area.
Some limitations on the services does not serve the purpose of the office’s existence with the presence of competitors in the area. But the policies that is beyond the control of the management may also be a hindrance to capture the market.
CONCLUSION
Management has to give weight on the recommendations and suggestions that are coursed through the personnel in-charge by clients and allow the extension office to implement improved procedures without sacrificing the internal control.
Limited tellering services is the most common complaint of the clientele and must not be taken for granted. A client who intends to make multiple transactions (ex. cash withdrawal and Loan application) may prefer to transact in the main branch rather than in the EO.