Loan Improvement Essay - 550 Words

Loan Improvement (Essay Sample) Content: Loan ImprovementNameInstitutional affiliationProfessorGradeDateLoan Improvement According to the theory of constraints, services sector inefficiency result from the structures and systems the institutions design for the delivery of services. Loans and loan processing mechanism in many banks and financial institutions take a sequence of events. These events are deemed only to facilitate transparency, the evaluation of the loanees ability to repay the loan and for reasons of accountability. Banking systems have a norm of excessive data gathering, which sometime impacts negatively on service quality (Chang, Shen Fang, 2011). At Barclays Bank, one of the oldest banking institutions among Anglophone economies, the traditional loan application and processing practices have routinely been applied without much improvement over the years. Loan improvement therefore is a crucial development for the institutions particularly in a contemporary environment of economic globalizati on. Under normal loan application process, one is expected to gather information about the type of loan they seek and supply the chosen institution with required information and loan application forms. The bank assesses the documents and approves the loan which is deposited in the customers bank account. After loan drawdown, the customer is expected to commence repayment as agreed (Wen-xing, 2009). This process is often times fraught with frustrations and hence the need for loan processing improvement. The identification of the systems constraint is critical to the attainment of progress and general efficiency improvement. Service inertia is the mechanisms that create redundancy and inefficiency in service delivery. By eliminating inertia, general improvement of the loan delivery process can be enhanced. It is argued that Information Technology (IT) have been used in specific cases to improve the speed of communication, data handling and data processing capacity of institution s. Moreover, the policy framework of the bank with regard to loan facilitation needs to be checked. For instance, having a very long checklist for credentials for loan eligibility is deemed redundant in practice. Only a few crucial requirements should be necessary for the evaluation of customers eligibility (Longbottom Hilton, 2011). Suggestions for loan services process improvement in the Barclays Bank therefore need to take into consideration the diversity of customer credentials and institutional mechanism as well as market conditions for loans. Smaller banks are a bit more rapid with loan processing and do not experience pronounced rates of loan repayment failures. Data envelopment analysis (DEA) is one contemporary practice that has produced cost effective service quality improvement for many institutions (Casu Girardone, 2010). It is advisable that Barclays Bank could adopt this process for continuous improvement of the loaning process. The diversification of the banks loan portfolio needs to be distributed evenly between the corporate and retail segments if the whole process is to be greatly improved by the bank. It is noteworthy that loan mechanism be a central concern for the banking fraterni...