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