Guide / Toolkit

Monitoring Individual Repayment in Group Guarantee Mechanism

Developing a tool for tracking group guarantees at individual level
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This tool brings together experiences of MFIs: MBK in Indonesia and Utkarsh in India, in tracking defaults at individual level and monitoring group guarantee implementation. ‘Monitoring Individual Repayments in Group Guarantee’ is a tool that demonstrates two approaches which have some features that can be adapted or improved based on specific requirements of stakeholders or MFIs. The tool uses three sub-processes to map up the actions of the MFIs in this regard: tracking individual non-payments and recording, consolidation of information and analysis at MFI backend, and action at the field level. Close tracking of users have helped the MFIs in the following ways:
  • Early warning system can help management detect and mitigate delinquency risk at an early stage as MFI can work on customized follow up with delinquent client based on the situation;
  • Ensuring that group members are trained to handle collection from delinquent peer group members ensures that no excessive pressure is put on the delinquent/defaulting member;
  • Helps investigate and track reasons for client dropout, as members may be forced to dropout to because of frequent defaults.

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