Enhancing Collection Efficiency in a Financial Institution in Cebu City, Philippines: A Comprehensive Collection Framework
Chan, Christine (2024)
2024
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2024060320409
https://urn.fi/URN:NBN:fi:amk-2024060320409
Tiivistelmä
Financial institutions are the backbone of economic activity. It is crucial in enabling cash flow and providing vital financial services that sustain people and enterprises. Financial institutions must collect debts effectively to sustain profitability, liquidity, and financial stability. Efficient debt collection mini-mizes loan loss provisions, maintains a consistent cash flow, and protects the organization's solvency. However, financial institutions face several difficulties in their operations, and one major problem that could seriously affect their performance and long-term viability is the efficient recovery of debt.
Concerning the reasons, this qualitative research engages explicitly in a case study. The study wanted to contribute to the financial institution in Cebu City, Philippines, that experienced a high level of bad debts based on the available financial reports as the secondary data. With that, the study used content analysis to conduct a deep dive into the financial records. Aside from that, using content analysis, the study discovered literature that benefited the output structure by integrating new lending procedure features. Also, to collect primary data, the study employed a structured interview guide for five (5) cli-ents and collecting agents to get their first-hand experience with the implemented collection scheme. The participating clients were delighted with the newly added features of the loan products, such as rebates, credit scores, coupons, increased loanable amounts, and loyalty programs. The participants said these features motivate and encourage them to pay their loans on or before the due date or take another loan. However, from the viewpoint of the collecting agents, it is not favorable since the im-plementation of the collection scheme is complicated and results in poor performance since they are still adjusting to the new lending procedure.
Developing a collection scheme contributes a lot to financial institutions as it helps them collect loan payments efficiently and increases their market share, making their presence in the market more no-ticeable. However, the collection scheme was tailored to the particular business's needs. As a result, the researcher provided a series of recommendations for further studies. It mainly suggests that the implementer of the collection scheme and its people, who are the collecting agents, be considered if things need to be improved from their perspective.
Concerning the reasons, this qualitative research engages explicitly in a case study. The study wanted to contribute to the financial institution in Cebu City, Philippines, that experienced a high level of bad debts based on the available financial reports as the secondary data. With that, the study used content analysis to conduct a deep dive into the financial records. Aside from that, using content analysis, the study discovered literature that benefited the output structure by integrating new lending procedure features. Also, to collect primary data, the study employed a structured interview guide for five (5) cli-ents and collecting agents to get their first-hand experience with the implemented collection scheme. The participating clients were delighted with the newly added features of the loan products, such as rebates, credit scores, coupons, increased loanable amounts, and loyalty programs. The participants said these features motivate and encourage them to pay their loans on or before the due date or take another loan. However, from the viewpoint of the collecting agents, it is not favorable since the im-plementation of the collection scheme is complicated and results in poor performance since they are still adjusting to the new lending procedure.
Developing a collection scheme contributes a lot to financial institutions as it helps them collect loan payments efficiently and increases their market share, making their presence in the market more no-ticeable. However, the collection scheme was tailored to the particular business's needs. As a result, the researcher provided a series of recommendations for further studies. It mainly suggests that the implementer of the collection scheme and its people, who are the collecting agents, be considered if things need to be improved from their perspective.