The Hidden Beast: Delinquency in Microenterprise Credit Programs

This book sheds light on ways of managing delinquency in microenterprise credit programmes and give some insights on the cost of delinquency and how to measure and monitor portfolio quality.

It argues that microenterprise credit programmes themselves control their levels of delinquency. With few exceptions, poor portfolio quality is more a reflection of a flawed credit programme, rather than "bad" borrowers or an unfavorable economic context, suggesting strategies that can help microenterprise credit programmes control their delinquency.

It points out:

• Weaknesses in the way that delinquency is currently treated in the microenterprise credit field, and encourages the use and of appropriate and well defined measures of portfolio quality;
• Discusses the many different definitions and formulas currently used to report on delinquency and portfolio quality;
• Recommends how to present an accurate and understandable picture of portfolio quality;
• Demonstrates that microenterprise credit programmes can control their portfolio quality;
• Examines the implications that portfolio quality has for credit institutions and their borrowers;
• Identifies causes of delinquency and suggests strategies for effective control;
• Provides recommendations that can help microenterprise credit programmes minimise their levels of delinquency.