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COLLECTION DISCIPLINE &
HANDLING WITH DELINQUENCIES
OBJECTIVE
At the end of this session you will be able to understand
What is a Collection Discipline Tools to Improve Biometric What is PAR ( Overdues) Reason of Overdues Effect of Overdues Handling with Overdues
WHAT IS COLLECTION DISCIPLINE The Success of Organization is largely attributable on client payment
discipline. The Sound planning of allocation of date and time of business area is the first Key of repayment discipline.
Date and Time allocation This practice must happened simultaneously with Area Survey by allocating
the fix date for a business area where there is a projection of one Day Crec Productivity ie. 140 – 160 Clients. This is for Better Time Management , Cost minimization, Risk Mitigations , and maximum productivity per day..
Less NFD Change This Practice will help to reduce the frequent Change in NFD in each and every
first Week of Month in sense of Time and Date change.
Examples of Burst and Best DL discipline
BURST CASE OF DL AT A GLANCE
BEST CASE OF DL AT A GLANCE
CreC Name :…………………………………………………………………. Cluster name : ……………………………………………………………………………………..
Area name Date/Time 7:00 AM 8:00 AM 9:00am 10:00am 11:00am 12:00pm 1:00pm
Ram Nagar 7Babita House
15 Sita House 10Ramani House
18 Sitara House 15
Adrash Nagar 8
Digha 9Sony House
20 Laxmi House
15 Kalawati House
20
Chai Tola 10 Resham House
18
Ghandhi Nagar 11
Mahendru 12
13 Pl keep it Blank till rest of date cover ( Will Help for 15 th August date Collection Etc.)
Sherapura 14
Kamaniya 15
Collection Planning Chart
TOOLS TO IMPROVE BIOMETRIC Importance of Biometric Microfinance Loans are based on mutual guarantee of clients
and the attendance on center make on date on time recovery . maximum clients on center means minimum risk in repayment.
Burst Case of Biometric
CREC Name No Yes Grand TotalBiom % Rating
Madhur Kapoor 150 8 158
5 CriticalManoj Garasiya 277 515 792
65 SignificantManoj Sisodiya 139 429 568
76 GoodNeelesh 199 550 749
73 SignificantOm Prakash Poddar 165 320 485
66 SignificantRajpal 235 398 633
63 SignificantSantosh Kumar Parmar 223 338 561
60 Significant
STRATEGY TO IMPROVE BIOMETRIC ( USE OF SFDC )
Area & Center Name NO Yes Grand Total BioM % Rating
Commitment By MCL MCL Sign
Area: BHIKHANA PAHARI (CHAI TOLI)
1- Centre:SANJU House
2 0 2
0 Critical Area: BHIKHANA
PAHARI (CHAI TOLI) 1- Centre:SHOBHA
House
11 1 12
8.33 Critical Area: BHIKHANA
PAHARI (CHAI TOLI)- Centre:KEERAN
House
9 5 14
35.71 Critical Area: BHIKHANA
PAHARI (CHAI TOLI)- Centre:MANORMA
DEVI PASWAN House
10 9 19
47.37 Critical Area: BHIKHANA
PAHARI (CHAI TOLI)- Centre:SANGITA
House
12 18 30
60 Significant
WHAT IS PAR (PORTFOLIO AT RISK) Increasing in Body Temperature indicated there is
some thing wrong in internal part of body which cum in reflection of Temperature ( Fever). So as in MFI the PAR % is the indicator of MFI asset quality ie portfolio in Risk.The Formula of calculation
Par = Sum of Unpaid Principal Balance of all past due
Total Gross Outstanding Loan Portfolio
In The Best Case scenario it should be <.5%
100
EFFECT OF PAR ( OVERDUE ) Postponed and Low Income
Slower Portfolio Rotation and Asset Productivity
Lower Staff Morale Higher Cost of Fighting overdue
Diminished Co’s Image
Chain Reaction
REASON OF PAR ( OVERDUE ) Client Based Activities Willful Default Deviation in credit administration process Involvement of Ring leaders Forced loan Loan For Non Productive Purpose Adverse Client Selection Insufficient investment Husband wife Problem Migration of Client Seasonality of Business or Low income( gestation Period)
o Organizational Based Poor Product Design/ Bundle of loan Delay in Loan Processing Lack of Proper Loan Monitoring and Follow up by Field Staff Lack of Effective MIS System Zero Acton Taken By Organization
HANDLING WITH DELINQUENCIES Account Review( Diagnosis of Account) Categorization of loan account PAR Reason * MIS Issue * Migration of Client *Pipeline Cases *Ring Leader Effect *
Staff Fraud * Wrong sale The categorization of loan account from poorest to most collective *Not Possible, * Little Possibility * Possibility
Strategy Formation PAR account Action Team and Campaign Special Incentive Scheme and Appraisal on performance , Removal
of Poor performer Crec, weed out approach of poor Client in L2 Loan , Fire on Fraudulent staff, Legal action approach
Always Action Approach
THANK YOU
Happy Collection
Prepared by Om Shankar Dubey