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Proposal: Micro Payments and Self Help Groups (SHG)

Mobile Bank-SHG Linkage, Uttar Pradesh, India
Mobile Bank-SHG Linkage, Uttar Pradesh, India (Photo credit: Wikipedia)
Proposal: Micro Payments and Self Help Groups (SHG)
For organisations practicing Micro Payments and Self Help Groups (SHG), Debt collection is their integral part of the credit management unit that secures payments from the debtor. Actually, a credit management unit usually handles these transactions where before, most banks perform this activity by hiring their own debts collection agent. With the advent of the business phenomenon of outsourcing during the early 1990s, whose foremost aim is to cut costs of doing business, a sizeable number of collection agencies have surfaced to provide the banks with the service of debt recovery. Whichever way the banks choose to collect the debts owed to them, problems arise which require the intelligent planning of the credit management unit of the institution. Bass (1998, p.93), in his book ‘Credit Management’, stated that ‘Effective collections do not just happen. They are the result of planning.’ Every business, should have a system for chasing debt payments, and an effective system starts with planning it. The debt collection plan of contemporary credit management units is the place to start if debt collection is to obtain a semblance of organization.
Actually, there are organisation Micro Payments and Self Help Groups (SHG) suffering from the growing number of nonpayers which has made the task of debt collection more difficult than it was in the past. Additionally, the increase in the intensity of competition among banking and other financial institutions to acquire clients has made this concern more severe. This project is a closer look at those concerns in an attempt to shed light on issue and the identification of present and potential strategies for minimizing or eliminating the instance of defaulters, as well as a review of the debts collection literature.
Research Questions and Objectives
The Objectives of the Project are:
Ø  Indicate the obligation of the debtors
Ø  Indicate the right of the Micro Payments and Self Help Groups (SHG) organisation to chasing/recover the debt
Ø  List the different action can take to chasing/recover the debt
Ø  Describe the problem of lower cash flow level
Ø  What’s the payment methods adopted currently
Ø  Why the debtors not paying the management fee
Ø  Identify the problem on payment method and weakness in credit control
Ø  Evaluate the payment methods is acceptable
Ø  Analysis the problem and find out the possible solution, suggest the necessary action and procedure the company should take to recover debt and improve its efficiency of debtor management
Ø  Evaluate the effectiveness on the possible solution

Significance of the Study
This project stemmed from the need of businesses to deal with the increasing number of defaulters in the debt collection system in order to facilitate better financial management. There is certainly the need to know of alternatives to current debt collection systems to better facilitate said activity of organizations. The target of this research project is to assist in the determination of effective and efficient debt collection system strategies to implement within credit institutions, so that players of the industry could better handle their credit collection efforts for their own organizational benefits. Clients and company resources will then be better managed, with excellent customer relationship management on one hand, and more effective and efficient internal systems on the other.

This project started with the detected need to analyze the debt collection systems of organisation practicing Micro Payments and Self Help Groups (SHG), as they have lately been subject to various complications, legally and otherwise. The formulation of objectives and determination of who would benefit from project completion then followed. The research design chosen utilizes the explanatory methods in describing the variables wherein the data, situations, or other facts collected will be explained or correlated with other data. It is especially useful when conducting a study wherein the data are immeasurable, such as feelings, beliefs, thoughts, and others (Mays & Pope, 2000). Basically, this study utilizes the descriptive research method, which uses surveys, interviews and observation. With this particular procedure, there is a high possibility that the study would be well-situated and quick. Actually, the descriptive type of research could also advise unanticipated assumptions. Nevertheless, it would be very stiff to rule out another explanation and especially deduce causations. In accordance to this, this kind of research approach is practical and reliable to use in this paper. The researcher actually chosen to use this kind of research bearing in mind the desire of the researcher to get first hand information from the interviewees so as to formulate rational and sound conclusions and recommendations for the study.
For this study, the researcher will interview respondents from the internal staff of organisations practicing Micro Payments and Self Help Groups (SHG) and will conduct surveys to their debtors/creditors. With regards to the survey results, it will involve categorical or numerical data or data that can be use for analysis to help the researcher answer the research questions. This part is more on quantitative information analysis. Actually, Saunders, Lewis,& Thornhill, (2004), defined quantitative as a type of empirical knowledge. Qualitative data are described in expressions of quality (Saunders et al, 2004). Apparently, qualitative information is the converse of quantitative, which more precisely describes data in terms of quantity (that is, using 'formal' numerical measurement). This data reflects to the information that will be gathered from interview.

Bass, R. (1998). Credit Management. Cheltenham: Stanley Thornes.
Mays, N. & Pope, C. (2000). Qualitative Research in Health Care. BMJ Bookshop. Accessed 26 May, 2008. From
Saunders, M., Lewis, P. & Thornhill, A. (2003). Research Methods for Business Students. 3rd Ed. London: Prentice Hall Financial Times.


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