credit collection
TRANSCRIPT
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A Research Proposal
Entitled: The Perceived Effects of Punishmentto Delinquent Debtors
in partial fulfilment for the requirements in
Credit and Collection
Presented By:
Dela Rosa, Divine AngeliqueDuran, ar!orie
"aspeo, #im $vyPere%, Beth&y%
Presented to:
#aren 'atacutan(ladys Tumbali
"ermin abborang
)ebruary *+, *-+
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INTRODUCTION:
Background of the Study:$n solving the problems dealing .ith delinquent payers in a business firm, the group
aims to solve the said matter through /no.ing the reasons for not paying promptly and
find out the best solution in dealing .ith them0
$n a business firm, rules should be improved and strictly follo.ed for the success of
running a business0 1nce it is not follo.ed, many problems .ill surely be e&perienced
or encountered that can lead to ban/ruptcy0 )or instance, a lending company for it to
prosper there should be an effective collection or strategies to follo.0 1ne of it is to
impose punishments to delinquent payers0 $n this manner, the client .ill find means and
.ays to pay the monthly payments of his loan0 1nce credit in loan is e&tended inevitably
the debtor could hardly pay the loan amount0 $f this case .ill happen al.ays, then the
lending .ill not prosper li/e.ise tendency is the debtor .ill either escape from his
responsibility or leads to rene.al of loans0 The responsibility to collect is greater than
the responsibility to pay since the interest .ill gro. bigger and bigger0 $n other .ords,
the creditor should run after the debtor and running is a must to be able to collect0 The
creditor should /no. ho. to handle delinquent payers and maintain their good
reputation to motivate debtors to continue business .ith them0
$ndeed, an amount not being paid could not be accounted if not being collected0 That isthe purpose of imposing effective collection of money0 $f collection fails then profitability
of the business .ill also suffer0 $n the study of 2alima 30 Paul, 20 2usela Devi and 'hee
(hee Tehmany entitled 4$mpact of late payment on )irms5 profitability: Empirical
evidence from alaysia 6*-*7, Pacific8Basin )inance9 they e&amine .hether late
payment 6P7 by customers impacts firms5 profitability0 And it .as found that +; of the
sampled firms e&perience P and P has a significant inverse effect on their profitability<
and those .ith shorter credit terms and Days 2ales 1utstanding 6D217 perform better
than those .ith longer credit terms and longer D210
Therefore before having a final transaction to the client, through evaluation of this
bac/ground especially on financial aspect or sources of income should be considered0
1nly capable and qualified client should be given attention or the chance so as not to
have problems in the collection0 Because .hen Ale& Addae8#oran/ye conducted a
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study .hich is 4The 'auses and 'ontrol of oan Default=Delinquency in icrofinance
$nstitution in (hana6*->70 ?e found out that the causes of loan default to include< high
interest rate, inadequate loan si%es, poor appraisal, lac/ of monitoring and improper
client selection0 $t .as concluded that the government and hence Ban/ of (hana should
regularly monitor and supervise the )$s so as to ensure safety of clients@ deposits and
customers@ confidence0
Discounts are not advisable because they might abuse it0 Although it is but normal in a
business to have a .in8.in strategy0 2o as to avoid such delinquent payers .e can as/
for collateral to motivate them in paying their obligations0
Statement of the problem and research uest!ons
Delinquency is one of the ma!or problems of credit institutions because it affects their
profitability0 $n order to collect these late payments credit institutions impose
punishments to the debtors0 This study aims to identify the perceived effect of imposing
punishment in collecting the payment of delinquent debtors0 $t also aims to ans.er the
follo.ing question:
-0 hat are the profile of the lending institution in terms of:
$0 3ears of E&istence
$$0 Type of $nstitution
$$$0 'apitali%ation
*0 hat is the perceived effect of the punishments imposed in collecting the
payment of delinquent debtors
C0 $s there a significant difference in the perceived effect of imposing punishment
in collecting the payment of delinquent debtors in terms of profile variable
S!gn!f!cance of the Study:This research paper .ill conclude the perceived effects of imposing punishment to
delinquent payment practices of debtors0 This .ould be useful to lending institutions for
them to be guided and to gain improvement on their collections0 $t .ill also serve as
guidance to the credit institutions in handling their delinquent debtors0
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Underp!nn!ng Theory
hile punishment can be effective in some cases, you can probably thin/ of a fe.
e&les of .hen punishment does not reduce a behavior0 Prison is one e&le0 After
being sent to !ail for a crime, people often continue committing crimes once they are
released from prison0
hy is it that punishment seems to .or/ in some instances, but not in others (ershoff,
E0 T0 6**7 have found a number of factors that contribute to ho. effective punishment
is in different situations0
)irst, punishment is more li/ely to lead to a reduction in behavior if it immediately
follo.s the behavior0 2econd, punishment achieves greater results .hen it is
consistently applied0 $t can be difficult to administer a punishment every single time a
behavior occurs0 Punishment also has some notable dra.bac/s0 )irst, any behavior
changes that result from punishment are often temporary0
Punished behavior is li/ely to reappear after the punitive consequences are
.ithdra.n, 2/inner e&plained in his boo/ About Behaviorism0
Perhaps the greatest dra.bac/ is the fact that punishment does not actually offer any
information about more appropriate or desired behaviors0 hile sub!ects might be
learning to not perform certain actions, they are not really learning anything about .hat
they should be doing0The factors contributed by (ershoff, E0 T0 6**7, Psychological Bulletin, -*, FCG8FHG
.ill be used in the research, given the importance of perception0
"!terature Re#!e$
D!scuss!on of "!terature by Themes
"ength of T!me Cred!tors Collect
ost consumer debts, .hether credit card debt, student loans, medical debt,
auto loans, or mortgages, are paid in their ordinary course0 According to one estimate
conducted by )air $saac 'orp0, appro&imately GF percent of all consumer debt is paid on
time and less than half of consumers have been reported as C or more days late on a
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payment0 Even this high level of voluntary payment depends in part on the perceived
effectiveness of the debt collection system in the event of non8payment0
Cred!t %r!ce that Cred!tors Impose
A study published by illiam Dun/elberg in -GH finds evidence that stricter
regulation of creditor remedies results in higher prices and lo.er levels of credit for
consumers0 $n -GHC, the state of isconsin enacted the isconsin 'onsumer Act
6'A7, .hich, among other things, imposed substantial ne. limits on the remedies
available to creditors on a consumer@s default0
)or a lender to ma/e a loan profitably, it must be able to price the ris/ of loss
accurately according to Todd Iy.ic/i 6*-7 on his Testimony Before the United StatesHouse of Representatives Committee on Financial Services Committee on Small
Business0 Therefore, if the ris/ of loss is higher, a lender .ill need to charge a higher
price to compensate for the heightened ris/ of loss0 $f the lender is unable to accurately
price the ris/ of the loan, such as because of regulatory limits, then the lender .ill
reduce its ris/ e&posure either by lending to fe.er borro.ers 6and, in particular, by
limiting credit offered to higher8ris/ borro.ers7 or by lending less to the same borro.ers
by reducing credit lines and loan si%e0 1ne element of the ris/ of loss is the ability to
collect from a debtor .ho defaults0 $f collection po.ers are .ea/er, the loss rate .ill be
higher, for t.o reasons0 )irst, if the creditor is more limited in its ability to collect, it .ill
recover less from the defaulted debtor, and collection efforts .ill be more costly0
2econd, if the consequences of default are less severe, borro.ers .ill be more li/ely to
default0 As a result, greater restraints on the ability of creditors to collect .ill tend to
increase their losses0 $n turn, lenders .ill respond to this increased ris/ of loss by
raising interests to compensate or by reducing ris/ e&posure0
As an a priori matter, therefore, it is not clear .hether borro.ers as a .hole .ill
be made better or .orse off from stricter regulation of collections0 Although they .ho are
already in default generally .ill benefit from greater restraints on collections, the benefit
.ill come at the e&pense of other consumers .ho may end up paying more or obtaining
less access to credit 6including the borro.er currently in default, .ho may .ant ne.
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credit in the future70 "oseph E0 2tiglit% and Andre. eiss 6-G-7 said at the time of
ma/ing a loan a lender cannot perfectly predict .hich particular borro.ers .ill
eventually default< all potential borro.ers .ill be forced to pay higher costs for credit,
but especially ris/ier borro.ers0 'onversely, .ea/ening creditor remedies .ill increase
the ris/ of loss for creditors, thereby raising the cost of lending0 2uch a reform .ill lead
to a reduced supply of lending and higher prices, everything else being equal0
Cred!tors &eneral %ro#!s!ons
A recent study by economist Ji/tar )edaseyeu confirms the standard economic
analysis that mandatory restrictions on creditor collections have an overall adverse
effect on consumers@ access to credit0 )edaseyeu created a database that rates the
strictness of states@ collection la.s and the effect on access to consumer credit in each
state0 ?e finds that stricter regulation of third8party debt collectors results in a lo.er
level of credit card collections in each state 6G; lo.er on average for each additional
restriction on debt collection activity7 and that this circumstance leads to a decrease of
*0*; in the number of ne. revolving lines of credit for consumers0
Kadia assuod, Anthony 2aunders, Barry 2cholnic/ 6*--7 and Anthony 2ia.,
Evans Bra/o Ktiamoah, Emmanuel 1teng, Beatrice 1po/u 6*->7 found evidence that
penalty fees are positively related to measure of ban/ mar/et share0 $t also finds that
fees are increasing in customer ris/, supports the position of defenders of penalty fees
such as ban/s0 )ees increasing in mar/et share are consistent .ith rent e&traction, and
the concerns e&pressed by politicians and regulators0
S!'e of "end!ng Inst!tut!ons
Responses from the sample firms conducted by $'?AE "0 PEE6*7 .ere found
to differ significantly .ith respect to firm si%e< larger small firms had a .orse late
payment problem and consequently had to do more in the .ay of 5bac/8end5 credit
management 6i0e0 collection, analysis of late payment and debtor days70 ?o.ever, there
.as barely any support for credit management training among this sub8group0 The
smaller 6micro7 firms had a lesser late payment problem and subsequently did less
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5bac/8end5 credit management but .ere more concerned .ith various aspects of
institutional finance0
()%OT(*SIS:
The .riters hypothesi%e that there is no significant difference in the perceived
effect of imposing punishment in collecting the payment of delinquent debtors in terms
of profile variable0
Research Paradigm:
$ndependent Jariable Dependent Jariable
The diagram sho.s that the independent variables .hich are the punishments imposed
affect the payment practices of delinquent debtors0
+ethods: A descriptive research methodology .ill be used by the researchers to assess the
perceptions of selected respondents regarding the perceived effect of imposing
punishment to delinquent payment practices of debtors0 The respondents .ill be the
lending institutions basing from their observation to the behaviour of their delinquent
debtors after they imposed punishment to collect the late payments0 Luestionnaires .ill
be utili%ed and be floated in various credit institutions here in the Tuguegarao0 Prior to
the conduct of the study, the questionnaires .ill sub!ect to reliability test0 The
respondents .ill be requested to indicate the e&tent to .hich the punishment affects the
delinquent debtors0 The data .as collected through a five8point i/ert scale and
analy%ed through use of percentages0
0
Perceived effects of punishment to delinquent
debtors
1. Profile
I. 3ears of E&istence
II. Type of $nstitution
III. 'apitali%ation
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"!terature +atr!,
Researche
rs
Bibliography a!or
1b!ective=
ain
Problems
Delineated
)actors=
Jariables=
Themes
ethods=
Data
(athering
tools=Respondent
s
a!or )indings
Beatrice
K!eru
arue
)actors
Affecting
oan
Delinquency
in icro
finance $nstit
utions in
#enya
6*-*7,$nternational
"ournal of
anagement
2ciences
and
Business
Research,
Jol0 -, $ssue
-*, *-* 7
To establish
.hich of the
factors
significantly
affects loan
delinquency
performance
in )$s in
#enya0
icrofinance
institutions<
2elf8help
groups@
specific
factors and
e&ternal
factors:
oan
2urvey
Luestionnai
re
delinquency
The microfinance
institutions and self8
help groups@ specific
factors and e&ternal
factors significantly
affect loan
delinquency
performance among
microfinanceinstitutions
in #enya0 $t
recommends that
)$s portfolios
management
strategies focus more
on the internal
causes of
delinquency .hich
they have morecontrol over and see/
practical and
achievable solutions
to redress
delinquency
problems0
2alima 30
Paul,
20 2usela
Devi, 'hee
(hee Teh
$mpact of
late payment
on )irms5
profitability:Empirical
evidence
from
alaysia
6*-*7,Pacifi
c8Basin
To e&amines
.hether late
payment
6P7 bycustomers
impacts
firms5
profitability0
ate
payment<
'redit
management<$)R2<
Profitability
Random
2ampling
Technique
$t .as found that +;
of the sampled firms
e&perience P and
P has a significantinverse effect on their
profitability< and
those .ith shorter
credit terms and
Days 2ales
1utstanding 6D217
http://www.sciencedirect.com/science/article/pii/S0927538X12000224http://www.sciencedirect.com/science/article/pii/S0927538X12000224http://www.sciencedirect.com/science/article/pii/S0927538X12000224http://www.sciencedirect.com/science/article/pii/S0927538X12000224http://www.sciencedirect.com/science/article/pii/S0927538X12000224http://www.sciencedirect.com/science/article/pii/S0927538X12000224http://www.sciencedirect.com/science/article/pii/S0927538X12000224http://www.sciencedirect.com/science/article/pii/S0927538X12000224http://www.sciencedirect.com/science/article/pii/S0927538X12000224http://www.sciencedirect.com/science/article/pii/S0927538X12000224http://www.sciencedirect.com/science/article/pii/S0927538X12000224http://www.sciencedirect.com/science/article/pii/S0927538X12000224http://www.sciencedirect.com/science/article/pii/S0927538X12000224http://www.sciencedirect.com/science/article/pii/S0927538X12000224
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)inance
"ournal
Jolume *,
$ssue F,
Kovember
*-*, PagesHHHMHG*7
perform better than
those .ith longer
credit terms and
longer D210
'hris
ayer ,
Tomas%
Pis/ors/i ,
Ale&ei
Tchistyi
The
inefficiency
of
refinancing:
hy
prepayment
penalties are
good for
ris/y
borro.ers
6"ournal of
)inancial
Economics,
Jol0 -H6*7,
+G> 8 H->0
*-C7
To provides a
theoretical
analysis of
the efficiency
of
prepayment
penalties in a
dynamic
competitive
lending
model .ith
ris/y
borro.ers
and costly
default0
$nefficiency of
refinancing<
Prepayment
penalties<
Ris/y
borro.ers<
ortgages
Descriptive
ethodolog
y
The results suggest
that regulations
banning refinancing
penalties might have
the unintended
consequence of
restricting access to
credit and raising
rates for the least
credit.orthy
borro.ers0
Kadia
assoud,
Anthony2aunders,
Barry
2cholnic/
The cost of
being late
The case ofcredit card
penalty fees,
6"ournal of
)inancial
2tability, H
6*--7 >G8
FG7
To e&amine,
theoretically
andempirically,
credit card
penalty fee
pricing0
'redit 'ards<
Penalty )ees<
Ris/
Nsing a
unique data
set
The study finds
evidence that penalty
fees are positivelyrelated to measure of
ban/ mar/et share0 $t
also finds that fees
are increasing in
customer ris/,
supports the position
of defenders of
penalty fees such as
ban/s0 )ees
increasing in
mar/et share is
consistent .ith rent
e&traction, and the
concerns e&pressed
by politicians and
regulators0
Anthony An Empirical To identify oan Default 2urvey There are high
http://www.sciencedirect.com/science/article/pii/S0304405X12002152http://www.sciencedirect.com/science/article/pii/S0304405X12002152http://www.sciencedirect.com/science/article/pii/S0304405X12002152http://www.sciencedirect.com/science/article/pii/S0304405X12002152http://www.sciencedirect.com/science/article/pii/S0304405X12002152http://www.sciencedirect.com/science/article/pii/S0304405X12002152http://www.sciencedirect.com/science/article/pii/S0304405X12002152http://www.sciencedirect.com/science/article/pii/S0304405X12002152http://www.sciencedirect.com/science/article/pii/S0304405X12002152http://www.sciencedirect.com/science/article/pii/S0304405X12002152http://www.sciencedirect.com/science/article/pii/S0304405X12002152http://www.sciencedirect.com/science/article/pii/S0304405X12002152http://www.sciencedirect.com/science/article/pii/S0304405X12002152
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2ia.,
Evans
Bra/oKtia
moah,
Emmanuel
1teng,Beatrice
1po/u
Analysis of
the oan
Default Rate
of
icrofinance
$nstitutions<6European
"ournal of
Business
and
anagement
6Jol0+,
Ko0**, *->7
the causes of
loan default
and the
processes
involved in
granting loanby
icrofinance
institutions in
(hana0
Rate<
onitoring
and
Repayment<
icrofinance
institutions0
positive correlation
bet.een the
constructs of loan
default causes and
ho. loans are
granted0
Ale&
Addae8
#oran/ye
'auses and
'ontrol of
oan
Default=Delin
quency in
icrofinance
$nstitution in
(hana
6American
international
"ournal 1f
'ontemporar
y Research
Jol0>, Ko0-*,December
*->7
To analy%e
the causes
and control
of loan
default=delinq
uency in
microfinance
institution in
(hana0
oan default<
oan
delinquency<
Default rate<
icrofinance
$nstitutions
Random
2ampling
Technique,
Luestionnai
re,
$ntervie.
The causes of loan
default to include<
high interest rate,
inadequate loan
si%es, poor appraisal,
lac/ of monitoring
and improper client
selection0 $t .as
concluded that the
government and
hence Ban/ of
(hana
should regularly
monitor andsupervise the )$s
so as to ensure
safety of clients@
deposits and
customers@
confidence0
2tephen
20 Ta&a,
3oung
42ally9
#imb,
2udhir
Kaira,
(etting The
Right Payoff
from
'ustomer
Penalty )ees
6Business
?ori%ons
Jolume F+,
$ssue C,
ayM"une
*-C, Pages
To identify
the aspects
of penalties
that generate
customer
dissatisfactio
n and
negative
emotional
and
behavioral
'ustomer
penalties<
)ees<
Relationship
management
'ollect and
Analy%e
Data
1ffered guidelines for
the implementation of
penalties that
balance the goals of
revenue generation
and customer loyalty0
These include:
preventing
unintentional failures,
managing the
perceived magnitude
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CHHMC+7 responses0 of penalties,
effectively educating
customers on the
offer, ensuring that
penalties are clear
and transparent,lin/ing penalty
decisions to
responsibility for the
transgression, ta/ing
into account narro.ly
missing avoiding a
penalty, and
consideration of the
customer relationship
and employee
empo.erment0
3oung
42ally9 #0
#im, Amy
#0 2mith
'rime and
Punishment
E&amining
'ustomers@
Responses
to 2ervice
1rgani%ation
s@ Penalties,
6--=*F7,
pages 6-+*8-07
The study
e&amines the
effects of
penalty
attributes
6severity,
fle&ibility,
adequacy of
an
e&planation7,attributions
6i0e0, causal
inference7,
perceived
!ustice,
disconfirmati
on, and
emotion on
customers@
evaluations
of penalties
imposed by
service
organi%ations
,
'rime and
Punishment0
Effects of
penalty
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Timothy
Besley,
2tephen
'oate,
(roup
lending,
repayment
incentives
and social
collateral6"ournal of
Development
Economics
Jolume >+,
$ssue -,
)ebruary
-GGF, Pages
-M-7
To
investigate
the impact
on
repayment
rates oflending to
groups .hich
are made
!ointly liable
for
repayment0
"oint iability<
ending
Data
Analysis
The analysis
suggests that such
schemes have both
positive and negative
effects on
repayment rates0 Thepositive effect is that
successful group
members may have
an incentive to repay
the loans of group
members .hose
pro!ects have yielded
insufficient return to
ma/e repayment
.orth.hile0 The
negative effect arises
.hen the .hole
group defaults, even
.hen some members
.ould have repaid
under individual
lending0
oh5d Al8
A%%ama, ,
R0 'arter
?illb, ,2udipta2a
rangic,
Repayment
performance
in group
lending:Evidence
from
"ordan6"ourn
al of
Development
Economics
Jolume GH,
$ssue *,
arch *-*,
Pages >>M
>->7
To
investigate
the effect of
screening,peer
monitoring,
group
pressure,
and social
ties on
borro.ing
groups5
repayment
behaviour as
an indirect
test of
different
theoretical
models0
(roup
lending<
Repayment
performance<'ount data
Data
Analysis
$t suggests that peer
monitoring, group
pressure, and social
ties reducedelinquency0 The
paper uncovers
interesting evidence
about the role of
social ties and
religion0 ost notably,
in an area .here
religion contributes to
attitudes and beliefs
of individuals, .e find
that religiosity
improves
"oseph E0
2tiglit%
'redit
Rationing in
hether to
e&tend
'redit
2tandards<
'redit
scoring,
Although credit
scores can predict a
http://www.sciencedirect.com/science/article/pii/030438789400045Ehttp://www.sciencedirect.com/science/article/pii/030438789400045Ehttp://www.sciencedirect.com/science/article/pii/030438789400045Ehttp://www.sciencedirect.com/science/article/pii/030438789400045Ehttp://www.sciencedirect.com/science/article/pii/030438789400045Ehttp://www.sciencedirect.com/science/article/pii/030438789400045Ehttp://www.sciencedirect.com/science/article/pii/030438789400045Ehttp://www.sciencedirect.com/science/article/pii/030438789400045Ehttp://www.sciencedirect.com/science/article/pii/030438789400045E
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and
Andre.
eiss
ar/ets .ith
$mperfect
$nformation, 6
H- A0
E'1K0 REJ0
CGC 6-G-77
credit, ho.
much credit
to e&tend,
.hen
collections
ondelinquent
accounts
should be
initiated, and
.hat action
should be
ta/en0
Ris/ of
Defaults<
'redit
Borro.ers
Discriminant
analysis,
decision
trees, and
e&pert
systems
propensity for default,
they are probabilistic
among those in a
particular credit score
range and thus they
imperfectly predictdefault for particular
borro.ers0 Thus, all
potential borro.ers
.ithin that credit
score range .ill pay a
similar ris/ premium0
Ji/tar)eda
seyeu
Debt
'ollection
Agencies
and the
2upply of
'onsumer
'redit 6)ed0
Reserve
Ban/ of
Phila0,
or/ing
Paper Ko0
-C8C, *-C7
2tudy
.hether the
inclusion of
seniority
clause in
sovereign
debt
contracts is
the reason
on borro.ing
too much
and default
too
frequently
Debt Dilution,
2eniority,
2overeign
Default
Luantitativel
y
Realistic
model,
'reditors
'reditors .ho lent
first have priority in
any restructuring
proceedings0 e
incorporate seniority
in a quantitatively
Realistic model of
sovereign debt and
find that seniority is
quite effective
$n mitigating the
dilution problem0
Barlyn,
su%anne
reportsO
.s!0com
Dealing .ith
deadbeats
all street
!ournal 8
eastern
edition0
-=-=*H,
vol0 *F
issue HH,
pr-0 p0
To offer
advice for
small
business
o.ners on
dealing .ith
clients .ho
are
delinquent
payers0
2mall
business<
payment
systems<
business
enterprises
)inancial
transactions
processing,
reserve
$t cites the benefits of
establishing formal
payment policies0 $t
mentions the
importance of
determining .hether
a customer is
contending .ith
financial difficulties
and might be able to
recover0 $t details the
different pre8emptive
measures that can be
adopted by small
businesses0
illiam
Dun/elber
Ban/s@
ending
Revie. the
credit
'redit
practices<
Price level
e&amination
)inds evidence that
stricter regulation of
-
8/20/2019 Credit Collection
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g Response to
Restricted
'reditor
Remedies
6'redit
Research'tr0 or/ing
Paper Ko0
*, -GH7
practices of
the creditors
and .hat
collection
methods to
be imposedon its
borro.ers0
rules<
'reditors
collection
methods
creditor remedies
results in higher
prices and lo.er
levels of credit for
consumers0
Achim
achauer
and artin
eber
Ban/
behavior
based on
internal
credit ratings
of borro.ers
6"ournal of
Ban/ing
)inance
Jolume **,
$ssues -M
--, 1ctober
-GG, Pages
-CFFM-CC7
$n credit ris/
management
a usual goal
is to price
loans
according to
their ris/
e&posure0
The purpose
of this tactic
is obvious0
enders
should be
compensate
d for the ris/
that
borro.ers do
not repaytheir loans0
Nsing the
variables of
the debt
contract0
Analysis is
based on
data from
five leading
(erman
ban/s0
)ound strong effects
of money illusion .ith
relatively small loan
rate premiums in
times of high mar/et
interest rates and
relatively high ones in
times of lo. mar/et
interest rates
"effrey B0
2teiner
and "ason
R0
(oldstein
'onstruction
oan
Remedies,
and ender
Borro.er
Relations
To
conditioning
disbursemen
t of loan
proceeds on
loan
balancing,
construction
loan
documents
limit a
lender5s
obligation to
fund in the
event liens
are filed by
Pro!ect8based
learning, 2elf8
directed
learning,
Educational
technology,
?igher
education0
2urvey $n dealing evidence
and other e&trinsic
communications may
help courts fill in the
gaps in contract
language, lenders
should be particularly
careful in
administering
construction loans
and communicating0
http://econpapers.repec.org/RAS/pwe359.htmhttp://econpapers.repec.org/RAS/pwe359.htmhttp://econpapers.repec.org/RAS/pwe359.htmhttp://econpapers.repec.org/RAS/pwe359.htm
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.or/ers at
the property,
as such liens
may threaten
the priority of
the lender5smortgage
lien0
Abdul8
Rahman,
?0, #ho,
0,and
ang, '0
ate
Payment and
Konpayment
Encountered
by
'ontracting
)irms in a
)ast8
Developing
Economy 6 "0
Prof0 $ssues
Eng0 Educ0
Pract0,
Jolume ->,
$ssue * 6April
*->7
-0-+-=
6A2'E7E$0-G
>C8FF>-0-
G7
To identify
the
underlying
causes of
late payment
in the
construction
sector in a
fast8
developing
economyQ
alaysiaQ
and to
develop
effective
solutions to
mitigate this
/ind of ris/0
Konpayment
ris/, ate
payment, )ast
8developing
economy, 'o
ntracting
firms, Payme
nt
capacity, 'as
h flo. ris/s
Luestionnai
re 2urvey
)indings reveal that
the 4cash flo.
problems due to
deficiencies in client@s
management
capacity9 is the most
significant underlying
cause for late
payment0 $n
mitigation of late
payment ris/s,
4investigating the
o.ner@s ability to pay9
.as analy%ed as the
most effective
solution0 $ndicators
for late payment and
nonpayment
identified in this studyenable contractors to
forecast payment
ris/s in both the
current pro!ect and
future pro!ects0
Brian T0
el%er
The Real
'osts of
'redit
Access:
Evidence
from the
payday
loans,
Payday
ending
ar/et 6The
To estimate
the real
effects of
credit access
among lo.8
income
households0
Payday oans 2urvey
Luestionnai
re
$ find no evidence
that payday loans
alleviate economic
hardship0 To the
contrary, loan access
leads to increased
difficulty paying
mortgage, rent and
utilities bills0
http://qje.oxfordjournals.org/search?author1=Brian+T.+Melzer&sortspec=date&submit=Submithttp://qje.oxfordjournals.org/search?author1=Brian+T.+Melzer&sortspec=date&submit=Submithttp://qje.oxfordjournals.org/search?author1=Brian+T.+Melzer&sortspec=date&submit=Submithttp://qje.oxfordjournals.org/search?author1=Brian+T.+Melzer&sortspec=date&submit=Submit
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Luarterly
"ournal of
Economics 6
*--7 -*+ 6-7
: F-H8FFF07
arie(odquin
icrofinanceRepayment
Performance
in
Bangladesh:
?o. to
$mprove the
Allocation of
oans by
)$s 6orld
Development
Jolume C*,
$ssue --,
Kovember
*>, Pages
-GGM-G*+7
To produce acomprehensi
ve analysis
of the
performance
of
microfinance
institutions
6)$s7 in
terms of
repayment0
icrofinance<social ties<
group
homogeneity<
nonfinancial
services
'omparative analysis
e test forendogeneity of loan
si%e and use
instrumental
variables to correct
for it0 $n the second
section of the paper,
.e use a
comparative analysis
of the determinants
of the repayment
performance and of
loan si%e in order to
ma/e policy
recommendations on
the allocation of loans
by )$s0
#ibosia
Kaomi
'helagat
Determinants
of loan
defaults by
small and
mediumenterprises
among
commercial
ban/s in
#enya,
pages F8*C,
*G
This study
sought to
determine
the
relationshipbet.een
Kon8
performing
oans
associated
.ith 2E
sector and its
determinants
among
commercial
ban/s in
#enya0
2E factors,
Kon8
performing
loans
Descriptive
survey
design,
'ommercial
ban/s
The study found out
that oan defaults by
2Es has
significantly been
increasing and anumber of
determinants affected
the loan defaults /ey
among them interest
rates and ho. long
the business has
been in operation0
The character of the
applicant has been
found to have a
significant impact on
loan
Defaults
aura '0
?aynes,
Donald P0
'ollection of
Delinquent
)ines: An
To test the
effectiveness
of mobile
Delinquent
fines< te&t
messaging
Adaptive
trial design
Te&t messages,
.hich are relatively
ine&pensive, are
http://www.sciencedirect.com/science/article/pii/S0305750X04001433http://www.sciencedirect.com/science/article/pii/S0305750X04001433http://www.sciencedirect.com/science/journal/0305750Xhttp://www.sciencedirect.com/science/journal/0305750Xhttp://www.sciencedirect.com/science/journal/0305750X/32/11http://www.sciencedirect.com/science/journal/0305750X/32/11http://www.sciencedirect.com/science/article/pii/S0305750X04001433http://www.sciencedirect.com/science/article/pii/S0305750X04001433http://www.sciencedirect.com/science/journal/0305750Xhttp://www.sciencedirect.com/science/journal/0305750Xhttp://www.sciencedirect.com/science/journal/0305750X/32/11http://www.sciencedirect.com/science/journal/0305750X/32/11
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(reen,
Rory
(allagher,
Peter "ohn
and
David "0Torgerson
Adaptive
Randomi%ed
Trial to
Assess the
Effectiveness
of AlternativeTe&t
essages
6"ournal of
Policy
Analysis and
anagement
Jolume
C*, $ssue
>, pages
H-MHC, Aut
umn *-C7
phone te&t
messaging
as an
alternative
method of
inducingpeople to
pay their
outstanding
fines0
found to significantly
increase average
payment of
delinquent fines0 e
found te&t messages
to be especiallyeffective .hen they
address the recipient
by name0
Daniel )0
#ohler
To pay or not
to pay: A
model of
international
defaults
6"ournal of
Economic
Behavior
1rgani%ation
Jolume >,$ssue -,
2eptember
*-*, Pages
*-+M**7
Argue that its
primary
function .as
to deter
default in the
first place by
giving
borro.ers an
incentive to
disclosehidden
assets0
Debtors@
prison<
Default<
$mprisonment
Empirical
analysis
The results suggest
that states in .hich
the publishing
industry developed
sooner 6thus
facilitating the flo. of
information7 .ere
more li/ely to enact
early bans on
imprisonment fordebt0
indy
eo.
"onathan
'roo/
$ntensity
models and
transition
probabilities
for credit
card loan
delinquencie
s 6European
"ournal of
1perational
Research,
volume *C+,
"anuary H,
e estimate
the
probability of
delinquency
and default
for a sample
of credit card
loans
Ris/ analysis,
probability of
default,
intensity
modeling,
time8varying
covariates,
state space
modelling,
retail loans
2emi8
parametric
multiplicativ
e ha%ard
models .ith
time8varying
covariates
Results indicate that
different types of
debtors behave
differently .hile in
different states0 The
probabilities
estimated for each
type of transition are
then used to ma/e
out8of8sample
predictions over a
specified period of
time0
http://onlinelibrary.wiley.com/doi/10.1002/pam.2013.32.issue-4/issuetochttp://onlinelibrary.wiley.com/doi/10.1002/pam.2013.32.issue-4/issuetochttp://onlinelibrary.wiley.com/doi/10.1002/pam.2013.32.issue-4/issuetochttp://www.sciencedirect.com/science/journal/01672681http://www.sciencedirect.com/science/journal/01672681http://www.sciencedirect.com/science/journal/01672681http://www.sciencedirect.com/science/journal/01672681http://www.sciencedirect.com/science/journal/01672681/84/1http://www.sciencedirect.com/science/journal/01672681/84/1http://www.research.ed.ac.uk/portal/en/persons/mindy-leow(f9f106e2-6d5b-4531-b218-464d6b50646a).htmlhttp://www.research.ed.ac.uk/portal/en/persons/mindy-leow(f9f106e2-6d5b-4531-b218-464d6b50646a).htmlhttp://www.research.ed.ac.uk/portal/en/persons/jonathan-crook(765739b2-8872-48e2-9c74-ac6c4cad3c15).htmlhttp://www.research.ed.ac.uk/portal/en/persons/jonathan-crook(765739b2-8872-48e2-9c74-ac6c4cad3c15).htmlhttp://onlinelibrary.wiley.com/doi/10.1002/pam.2013.32.issue-4/issuetochttp://onlinelibrary.wiley.com/doi/10.1002/pam.2013.32.issue-4/issuetochttp://onlinelibrary.wiley.com/doi/10.1002/pam.2013.32.issue-4/issuetochttp://www.sciencedirect.com/science/journal/01672681http://www.sciencedirect.com/science/journal/01672681http://www.sciencedirect.com/science/journal/01672681http://www.sciencedirect.com/science/journal/01672681/84/1http://www.sciencedirect.com/science/journal/01672681/84/1http://www.research.ed.ac.uk/portal/en/persons/mindy-leow(f9f106e2-6d5b-4531-b218-464d6b50646a).htmlhttp://www.research.ed.ac.uk/portal/en/persons/mindy-leow(f9f106e2-6d5b-4531-b218-464d6b50646a).htmlhttp://www.research.ed.ac.uk/portal/en/persons/jonathan-crook(765739b2-8872-48e2-9c74-ac6c4cad3c15).htmlhttp://www.research.ed.ac.uk/portal/en/persons/jonathan-crook(765739b2-8872-48e2-9c74-ac6c4cad3c15).html
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*->, pages
+F8+G> 7
"0 'roo/
"0 Banasi/
)orecasting
and
e&plaining
aggregateconsumer
credit
delinquency
behaviour
6$nternational
"ournal of
)orecasting,
volume *,
"anuary
*-*, pages
->F8-+7
e model
aggregate
delinquency
behaviour for consumer
credit
6including
credit card
loans and
other
consumer
loans7 and
for
residential
real estate
loans using
data up until
*0
)inance, 'o8
integration,
AR$A
models, Errorcorrection
models, Time
series, Nnit
roots
'orrection
models
e find evidence to
support the portfolio
e&planations of
declines in creditquality for consumer
and for real estate
loans, but support for
the reduced stigma
e&planation .as
restricted to real
estate loans0
Evidence supportive
of household8level
e&planations of
irrational borro.ing
and une&pected net
income shoc/s .as
found for consumer
and real estate loans,
but evidence of
strategic default .as
restricted to the
volume of consumer
loans and real estate
loans, and not forcredit cards0 e also
found that the error
correction model
gave forecasts of the
volume of delinquent
consumer debt .hich
.ere of an accuracy
comparable to that of
an AR$A model0
Eyo
Emmanuel
10-,
errian A0
K.aogu-
and $0 A0
Asuquo-
Effectiveness
of oan
Delinquency
anagement
2trategies of
)ormal
enders
To assess
the
management
strategies
aimed at
reducing
loan
oan
delinquency<
formal
lenders<
farmers< A/.a
$bom 2tate0
ultistage
sampling
technique <
questionnair
e
The findings in this
research confirm that
the loan delinquency
reducing strategies
.ere not !udiciously
implemented by the
lenders0 Also, the
http://www.research.ed.ac.uk/portal/en/persons/jonathan-crook(765739b2-8872-48e2-9c74-ac6c4cad3c15).htmlhttp://www.research.ed.ac.uk/portal/en/persons/john-banasik(c729d730-880e-42c2-9c3c-03a1122d841d).htmlhttp://www.research.ed.ac.uk/portal/en/persons/jonathan-crook(765739b2-8872-48e2-9c74-ac6c4cad3c15).htmlhttp://www.research.ed.ac.uk/portal/en/persons/john-banasik(c729d730-880e-42c2-9c3c-03a1122d841d).html
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among
)armers in
A/.a $bom
2tate,
Kigeria6Britis
h "ournal ofEconomics,
anagement
Trade,
$22K: **H8
GS,Jol0: C,
$ssue0: $ssue
> 61ctober8
December77
delinquency<
compare the
e&tent of
loan default
among
lendinginstitutions
and analy%e
the impact of
some
variables in
reducing
loan
repayment
problems,
under the
e&isting
regime of
loan
delinquency
management
strategies0
behavior of selected
variables under the
going delinquency
management regime
suggest that primary
occupation, loan si%e,loan use, duration of
loans and visits of
ban/ officials are
some of the variables
that need to be
manipulated to
achieve the desired
level of loan
repayment0
$nvariably, proper
implementation of the
e&isting loan
delinquency
management
strategies and proper
manipulation of
factors that support
loan repayment
.ould be invaluable
in enhancing the
effectiveness of thee&isting loan
delinquency
management
strategies in reducing
loan repayment
problems in A/.a
$bom 2tate, Kigeria0
Bismar/
Addai and
'hengyi
Pu
The $mpact
of Delinquent
oans on
)inancial
Performance
of Ban/s in
(hana
6British
"ournal of
Economics,
$nvestigates
into the
impact of
delinquent
loans on
financial
performance
6interest
income and
net profit7 of
Delinquent
oans<
interest
income< net
profit<
financial
performance<
ban/s<
(hana
Luantitative
Research
Approach<
2ampling
ethod
$t is recommended
that ban/s embar/ on
effective and regular
monitoring of the loan
from the time of
disbursement till the
final repayment as a
means of reducing
delinquent loans and
its antecedent impact
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management
Trade,
G6*7,
$ssue0: >
6April77
The paper
estimated
the loan
repayment
inde& and
e&amined
the
determinants
of loan
repayment
from a
sample of
rural .omen
fish traders
obtained
through a
multi8stage
sampling in
four selected
mar/ets in
A/.a $bom2tate,
Kigeria0
oanable
funds<
households<
loan
providers<
loan default0
Descriptive
and
inferential
statistics
The paper
recommended the
evolution of a more
proactive loan
monitoring procedure
by lenders such as
verification of the
loan .orthiness and
previous loan
repayment history of
borro.ers before
granting loans,
encouraging the
patronage of formal
credit sources,
pursuing policies that
.ould reduce
household si%es as
.ell as the setting 8
up of loan delinquent
court to prosecutedefaulters as the .ay
out0
illiam
Brent,
ynne
#elly,
Debby
indsey8
Taliefero,
Russell
Price
Determinants
1f ortgage
Delinquency
6"ournal of
Business
Economics
Research,
Jol G, Ko *
6*--77
E&amines
mortgage
delinquency
rates for
loans in each
state and
ashington,
D' from
*> through
*G in order
to gain
insight into
the /ey
factors that
drive
Real estate
financing<
foreclosures
and mortgage
lending
Empirical
Analysis
The findings suggest
that borro.er income,
type of loan, and the
general health of the
economy remain
important in
determining
delinquency
ris/0 Also, factors that
determine C8 and
+8day delinquency
rates differ from
those that determine
G8day and GU day
delinquency rates0
http://www.cluteinstitute.com/ojs/index.php/JBER/issue/view/203http://www.cluteinstitute.com/ojs/index.php/JBER/issue/view/203http://www.cluteinstitute.com/ojs/index.php/JBER/issue/view/203http://www.cluteinstitute.com/ojs/index.php/JBER/issue/view/203
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residential
mortgage
delinquency0
Eric
Arentsen,
David '0auer,
Brian
Rosenlund
,
?arold ?0
Ihang,
)eng Ihao
2ubprime
ortgage
Defaults and'redit
Default
2.aps
6The "ournal
of )inance
, Jolume H,
$ssue *
April *-F
Pages +GM
HC-7
To offer
empirical
evidence onthe adverse
effect of
credit default
s.ap 6'D27
coverage on
subprime
mortgage
defaults0
'redit Default
2.ap<
2ubprimeortgage
Empirical
Analysis
e find that higher
defaults concentrate
in mortgage pools.ith concurrent 'D2
coverage, and .ithin
these pools the loans
originated after or
shortly before the
start of 'D2
coverage have an
even higher
delinquency rate0
ei "iang,
Ashlyn
Ai/o
Kelson,
and
Ed.ard
Jytlacil
iar@ oan
Effect of
1riginal of
1rigination
'hannel and
$nformation
)alsification
on ortgage
Delinquency
6the revie.
of economicsand
2tatistics,
Jol0 S'J$,
arch *->,
Ko0 -7
To $dentify
and qualify
the icro8
level
fundamental
causes of the
mortgage
crisis and
highlight t.o
ma!or
problem0
ortgage
delinquency<
)alsification
Nnique
Proprietary
Data 2et
e find that third8
party8originated loans
are more than F;
more li/ely to be
delinquent than ban/8
originated loans, and
about three quarters
of this difference can
be attributed to lo.er
borro.er and loan
quality based onobservable ris/
factors0 e find a
strong evidence of
information
falsification among
bro/er8issue loans0
-uest!onna!re:e students from the Nniversity of 2t0 ouis Tuguegarao conducting a study about 4The
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Perceived Effects of $mposing Punishments for Delinquent Payment Practices of
Debtors90 e humbly as/ for your participation by ans.ering honestly the follo.ing
questions:
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D$RE'T$1K2: Ans.er the follo.ing questions by putting a chec/ mar/ on the space
provided using the follo.ing
- Kever * 2eldomC 1ften> 2ometimes
F Al.ays
-U*STIONS 1 2 3 4 5
-0 $f the debtor don@t pay his debt punishment is impose
*0 After the punishment is imposed the debtor
immediately pays his due0
C0 After the punishment is imposed the debtor goes to
the credit institution to tal/ about ho. to settle the
account0
>0 After imposing the punishment the delinquency rate
decreases0F0 The punishments affect the payment practices of
debtors0
+0 After imposing punishments customers still come to
avail credit0
H0 'ustomers never ta/e any action even if punishments
are imposed0
0 After the punishment is imposed the customer never
avail any credit in the institution0
G0 The institution filed la.suit against the debtor in order
to collect payment0-0 After the debtor settled the account the institution
limits the amount of credit given to the particular debtor0