Loan officers and loan 'delinquency' in microfinance: a Zambian case

Dixon, Rob and Ritchie, John and Siwale, Juliana (2007) Loan officers and loan 'delinquency' in microfinance: a Zambian case. Accounting Forum, 31 (1). pp. 47-71. ISSN 0155-9982

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Official URL: http://dx.doi.org/10.1016/j.accfor.2006.11.005

Abstract

The paper seeks to promote greater understanding of the importance of loan officers in group-based microfinance by explaining their actual roles, dilemmas and tensions when working with poor clients. Few existing studies have used data outside Bangladesh and most focus upon relatively well-performing institutions. Using data from Zambia this study focuses on the recent crisis of Christian Enterprise Trust of Zambia (CETZAM) and the effects of its practices for accounting for and dealing with defaulters. The findings firstly show that loan officers faced powerful hierarchical accountability pressures and pursued inappropriate methods to compel further repayments to resolve this crisis. Its approach to borrower default was found to be stressful for loan officers and potentially detrimental for CETZAM's own short and long-term survival by reducing client loyalty and trust.

Item Type:Article
Additional Information:The paper seeks to promote greater understanding of the importance of loan officers in group-based microfinance by explaining their actual roles, dilemmas and tensions when working with poor clients. Few existing studies have used data outside Bangladesh and most focus upon relatively well-performing institutions. Using data from Zambia this study focuses on the recent crisis of Christian Enterprise Trust of Zambia (CETZAM) and the effects of its practices for accounting for and dealing with defaulters. The findings firstly show that loan officers faced powerful hierarchical accountability pressures and pursued inappropriate methods to compel further repayments to resolve this crisis. Its approach to borrower default was found to be stressful for loan officers and potentially detrimental for CETZAM's own short and long-term survival by reducing client loyalty and trust.
Keywords:Finance, Loan deliquency, Loan officers, Microfinance Institutions, Poverty, Zambia
Subjects:N Business and Administrative studies > N190 Business studies not elsewhere classified
Divisions:College of Social Science > Lincoln Business School
ID Code:5834
Deposited By: Juliana Siwale
Deposited On:13 Jun 2012 22:26
Last Modified:13 Mar 2013 09:10

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