Are Loan Utilisation Checks Really Necessary? 

• by Graham Wright
• Feb 27, 2008
• 1 min
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This note focuses on diverse financial services driven by the diverse needs of people especially MFIs.

This note focuses on diverse financial services driven by the diverse needs of people. Typically MFIs provide working capital, which in many cases, are not used as per the stated purposes by the clients. Subsequently, this note questions the necessity of utilisation checks in microfinance service delivery. However, the note also maintains that loan utilisation checks are extremely important for larger individual, enterprise development loans due to its large loan size and sanctioned on the basis of the credit officers’ assessment of the cash flow of that particular business.