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| Mobile Bank-SHG Linkage, Uttar Pradesh, India (Photo credit: Wikipedia) |
Proposal: Micro Payments and Self
Help Groups (SHG)
Introduction
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.
Methodology
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.
References:
Bass, R. (1998). Credit
Management. Cheltenham: Stanley
Mays, N. & Pope, C. (2000). Qualitative Research in Health Care. BMJ Bookshop. Accessed 26 May, 2008.
From http://www.bmjpg.com/qrhc/chapter1.html.
Saunders, M., Lewis, P. & Thornhill, A. (2003). Research Methods for Business Students. 3rd Ed. London:
Prentice Hall Financial Times.
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