Collections Management flashcards

To maximise recovery while preserving the customer relationship where that relationship still has value. This differs from pure enforcement, which is why collections is organised as a distinct discipline from legal recovery.

Clarity: the debtor knows exactly what is owed, by when, and the consequence of non-payment. Timeliness: contact is made promptly once an account falls due. Consistency: the same message and terms across every channel and contact, so a debtor cannot shop for the most lenient officer. Documentation: every contact and commitment recorded, for legal protection and continuity.

A small proportion of accounts (often the largest or most complex) typically holds a disproportionate share of the total outstanding. Direct the most intensive effort (senior attention, more frequent contact, faster escalation) at that high-value group, rather than spreading effort evenly.

Documentary collection: the exporter's bank forwards the documents to the importer's bank, which releases them only on payment or acceptance. The banks do not guarantee payment. Documentary credit (letter of credit): the issuing bank itself guarantees payment once compliant documents are presented. Stronger assurance, but more costly and demanding to arrange.

The rate at which accounts move from one delinquency bucket (for example 30 days past due) to the next (60 days). Roll rate = accounts that rolled forward / accounts that entered the bucket x 100. It is forward-looking: a rising roll rate warns of deteriorating collection effectiveness before write-offs rise.

Rescheduling: adjusts the repayment schedule (extended tenor, revised instalment) without changing the total amount owed. Consolidation: combines several outstanding obligations into a single facility with unified terms, simplifying repayment and collection.

Settle the oldest invoice first, then apply what is left to the next oldest, and so on. Example: invoices of KES 50,000, 30,000 and 20,000 (oldest first) and an M-Pesa payment of KES 65,000 clear the first invoice and leave KES 15,000 on the second, so KES 35,000 remains in total.

Hardship (illness, job loss and similar) calls for a different, more supportive approach, such as counselling. Failing to tell the two apart risks unfair treatment of a vulnerable customer and, in a regulated consumer credit environment, a compliance breach.

Personal data (including contact details and payment history) may only be processed lawfully, fairly and for the specific purpose collected. Contacting a debtor's employer, relatives or social media contacts to pressure repayment risks breaching its data minimisation and third-party disclosure restrictions.

Centralised: one dedicated unit for the whole organisation. Consistent process, less local and relationship knowledge. Decentralised: collections within business units or branches. Closer to the customer, less consistent practice. Hybrid: common in larger Kenyan banks and SACCOs. A central early-stage call centre, escalating to relationship managers or a recoveries unit for larger or complex accounts.

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

This answer comes with Collections Management. Buy the subject

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