Risk Management Practices of Lending Institutions: Basis for Enhancement of Risk Management Plan

Mercy V. Torres, Janice S. Cucio, Vivien Amor Viloria and Noel B. Agustin
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Mercy V. Torres: Nueva Ecija University of Science and Technology, Nueva Ecija, Philippines
Janice S. Cucio: Nueva Ecija University of Science and Technology, Nueva Ecija, Philippines
Vivien Amor Viloria: Nueva Ecija University of Science and Technology, Nueva Ecija, Philippines
Noel B. Agustin: Nueva Ecija University of Science and Technology, Nueva Ecija, Philippines

International Journal of Research and Innovation in Applied Science, 2025, vol. 10, issue 7, 1221-1234

Abstract: This study explored the risk management practices of lending institutions in Cabanatuan City to provide a basis for enhancing their risk management plans. Employing a quantitative descriptive research design, the study gathered and analyzed data from 135 respondents across 15 lending institutions. These institutions were selected based on their operational experience, as they had been in the industry for over ten years, ensuring the representation of established practices and insights. The key respondents included General Managers, Loan Officers, Compliance Officers, Risk Management Officers, and other employees, all of whom played crucial roles in the loan approval process and risk management framework. The findings revealed that lending institutions in Cabanatuan City exhibited a proactive approach to risk management, particularly in risk identification, assessment, and planning, although there was room for improvement in practices such as regular audits and the use of advanced analytics. Additionally, challenges such as economic volatility, credit risk, cybersecurity concerns, and liquidity management were present but not critical. The study concluded with an action plan aimed at enhancing the consistency and comprehensiveness of risk management practices. Recommendations included strengthening risk identification, systematizing risk assessment procedures, integrating external expertise in risk planning, focusing on cybersecurity training, and enhancing financial resilience. This action plan was designed to foster a more proactive, comprehensive, and resilient risk management framework within the lending sector in Cabanatuan City.

Date: 2025
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