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Loan Portfolio Assessement in Practice 

Author: Manoj Sharma, Graham A.N. Wright
Published: June 12, 2006

Abstract:

This note talks about the significance of loan portfolio audit as an essential feedback to the stakeholders in order to understand the risks in the MFI’s loan portfolio and the systems/procedures used to mitigate this risk. It explains in details the process for conducting loan portfolio audit which includes sample selection, verification of loan management processes and documentation to check for consistency and completeness, and looking at portfolio management policies, systems and procedures in relation to international best practices. The note also brings forth the issues arising out of a loan portfolio audit like non existence clients, mismatches in records, rescheduling and practices without management’s approval.

Tags: Microfinance , Portfolio Quality and Due Diligence , Risk management , Joint liability group , Self help groups , Bandhan , SKS , Equity Bank , BN54 , BN 54

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