Generally, the loan portfolio of a micro-finance organization is its largest asset. The loan portfolio enables the organization to continue to provide credit to borrowers and to earn revenue. It is necessary, therefore, to manage the portfolio in such a way as to limit delinquency and loan default.

This lesson demonstrates the importance of accurately measuring the portfolio risk, provides an understanding of how the quality of the portfolio affects the viability of a micro-finance organization, and offers ways to manage the credit operations to minimize the risk to the portfolio.

Topics covered include:

  • Portfolio outstanding
  • Repayment rates
  • Measuring portfolio risk
  • Aging analysis
  • Loan loss reserves
  • Write-offs
  • Rescheduling/refinancing loans
  • The cost of delinquency
  • Controlling delinquency
reviewed & published
Ledgerwood, J.
finance - lesson 5
Mfi Management, Donors, Delinquency