Innovative Delinquency Management

This research paper focus into the most challenging aspect of any MFIs that is the evaluation of credit worthiness of a client prior to loan disbursement using credit scoring score card and collection of data regarding the repayment in a very cost effective way. Though this method of grass-root economic development has showed pledge throughout the world but conversely problems may arise if the proper systems are not in place to support the intensification of microfinance. If lending institutions are not well-versed about the credit-worthiness of potential clients, it can lead to negative effects on the performance of MFI loan portfolios and will result in over-indebtedness of clients.