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Default risk and debt recovery strategies in microfinance: evidence from Sri Lankan microfinance sector

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dc.contributor.author Kalpani, B.L. Wathsala
dc.contributor.author Abeysekera, Ruwan
dc.date.accessioned 2024-04-19T06:55:57Z
dc.date.available 2024-04-19T06:55:57Z
dc.date.issued 2018
dc.identifier.citation Kalpani, B.L. Wathsala, Abeysekera, Ruwan (2018), Default risk and debt recovery strategies in microfinance: evidence from Sri Lankan microfinance sector, Journal of Accountancy & Finance, the Department of Accountancy, Wayamba University of Sri Lanka en_US
dc.identifier.uri http://repository.kln.ac.lk/handle/123456789/27891
dc.description.abstract Microfinance Institutions (MFIs) contribute immensely to low income earning individuals by providing microcredit and other services such as insurance, savings and training to engage in income generating activities. Microfinance spurs entrepreneurship, alleviates poverty and empowers women. Since MFIs provide microcredit to low income earning individuals who cannot provide collateral, there is a significant risk involved in lending. Hence, MFIs need to have good recovery strategies to maintain better loan portfolios. Thus, the objective of this study is to examine the default risk and debt recovery strategies adopted by Sri Lankan MFIs. Multiple case study method was used in this study as the research method and data was gathered using in depth interviews. Findings show that taking preventive actions such as quality screening, following up and critical monitoring, enhancing social capital, field officer portfolio tracking, providing Business Development Services (BDS), and using effective incentive systems can reduce the default risk. The debt recovery strategies identified by the present study are promise register, reminder letters, deductions form savings and guarantor’s income, and legal actions that could reduce the arrears in the status of default. The findings of this study contribute to both the epistemological and practical domains. en_US
dc.publisher the Department of Accountancy, Wayamba University of Sri Lanka en_US
dc.subject Case Study Method, Debt Recovery Strategies, Default Risk, Microfinance Institutions, Stakeholder Theory en_US
dc.title Default risk and debt recovery strategies in microfinance: evidence from Sri Lankan microfinance sector en_US


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