Delinquency measurement and control and interest rate calculation and setting

These course notes from CGAP contain the main technical messages and concepts that they deliver in their training courses. CGAP emphasise that the materials alone to not substitute for attending a course which incorporates case studies and exchange of experience with others. However, if you are looking for a concise overview and summary of the issues and methods relating to delinquency management and interest rate calculation, then these are an excellent resource.

Module one covers the delinquency management topic. It contains sections on:

  • Understanding the causes and costs of delinquency
  • Measuring delinquency, including the quality of loan portfolio, portfolio at risk, repayment rates and the effect of loan loss provisions, reserves and write-offs on financial statements
  • Controlling delinquency

Module two covers interest rates. It contains sections on:

  • Interest rate concepts and MFI sustainability
  • Setting sustainable interest rates
  • Effective interest rates, including the impact of fees, forced savings and loan terms on effective interest rates
  • Costs of credit from the borrower’s perspective
  • Confronting barriers to setting sustainable interest rates

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