Related Resources

Toolkit: Financial Management and Ratio Analysis
This toolkit offers a practical training in basic financial management and ratio analysis for MFIs. It provides an overview of the key aspects of accounting in microfinance institutions describes the primary financial statements and portfolio reports of MFIs and describes the commonly...
780.83 KB
Download
Understanding and Assessing the Demand for Microfinance
It is clear, and now generally accepted, that poor people want, need and do indeed save. Low income clients have limited access to formal and regulated financial services and thereby resort to semi-formal service providers. This further aggravated with MFIs being prohibited from offering...
869.91 KB
Download

Games Loan Clients Play

Author: Henry Sempangi
Published: July 19, 2006

Abstract:

Generally the clients of financial service providers either test controls, exploit weaknesses in their system or test the institution’s capacity to live up to its promises. This note discusses some of these tactics used by the clients individually or in a group to avoid payments and possible solutions to the financial service providers. Some of the games played by the clients are mobilising ghost clients, involving family members, servicing loans of a drop out to get higher loan amounts of next cycle, prepayments, loans from other MFIs on the same business in the names of their friends or relatives, false guarantors amongst many others discussed in this note. The possible solutions, as the note suggests, range from immediate follow up to setting up internal audit team and loan portfolio audit.

Tags: Microfinance , Risk management , Internal audit and control systems , Fraud management , Loan portfolio , Loan portfolio audit , Microfinance institution , BN57 , BN 57

0 Comment
1 Likes Like
176.12 KB
Download

Leave a Comment