The impact of collections strategy on the profitability of unsecured bank micro-loans

dc.contributor.authorKahn, A.
dc.contributor.authorWard, Michael
dc.contributor.emailmike.ward@up.ac.zaen_US
dc.date.accessioned2009-04-02T12:36:34Z
dc.date.available2009-04-02T12:36:34Z
dc.date.issued2008-11
dc.description.abstractThis research examines bank collections strategy by comparing two micro-loan books; one using a behaviour based strategy, in which a client is encouraged to re-establish regular payments and the other using an arrears based strategy, where the client must repay missed instalments immediately. The results show that the collections outcome does not vary according to collections strategy. However, in contrast to industry best practice, behaviour based collections results in 3,37% more revenue when the loan is rehabilitated, and a 4,54% reduction in losses when the loan is written off. The study also finds that the cost of using a behaviour based collections strategy is lower.en_US
dc.identifier.citationKahn, A & Ward, M 2008, 'The impact of collections strategy on the profitability of unsecured bank micro-loans', Studies in Economics and Econometrics, vol. 32, no. 3, pp. 1-19. [http://www.journals.co.za/ej/ejour_bersee.html]en_US
dc.identifier.issn0379-6205
dc.identifier.urihttp://hdl.handle.net/2263/9438
dc.language.isoenen_US
dc.publisherBureau for Economic Research and the Graduate School of Business, University of Stellenboschen_US
dc.rightsBureau for Economic Research and the Graduate School of Business, University of Stellenboschen_US
dc.subjectBank collections strategyen_US
dc.subjectProfitabilityen_US
dc.subjectBehaviour based strategyen_US
dc.subjectArrears based strategyen_US
dc.subjectUnsecured bank micro-loansen_US
dc.subject.lcshBank loansen
dc.titleThe impact of collections strategy on the profitability of unsecured bank micro-loansen_US
dc.typeArticleen_US

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