Tools & Resources Smart Note: Facing Over-indebtedness at Partner Microcredit Foundation

Smart Note: Facing Over-indebtedness at Partner Microcredit Foundation

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Partner Microcredit Foundation avoids client over-indebtedness by recognizing that a risk for the client is a risk for the institution. Partner performs rigorous credit analysis of its clients before issuing a loan and follows up with audits to verify proper staff behavior and discover why clients are not able to meet their obligations.

partner_logo_fullResponsibility for avoiding over-indebtedness rests with both clients and institutions. For clients, this means making prudent decisions and judging their repayment capacity. For institutions, this means carefully assessing a client’s ability to repay.

Lending in a highly competitive microcredit market, Partner Microcredit Foundation avoids client over-indebtedness by recognizing that a risk for the client is a risk for the institution. To mitigate these risks, Partner performs rigorous credit analysis of its clients before issuing a loan and follows up with audits to verify proper staff behavior and discover why clients are not able to meet their obligations. Proactive measures like financial-literacy programs and client-loyalty efforts complement analysis and audits to create a robust system to avoid client over-indebtedness.

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