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Defaulter study at Power house colony

Default is the single most risk endangering any institution carrying out the
business of lending that too rural lending. Despite proper safeguard
measures, rural banks are always prone to continuous default and this is
prime reason behind limited rural loans on the banks part. In such situation
BASIX with its well-defined framework is carrying out its activity, still there
are incidences of defaults.
BASIX has defined the terms related with default on the part of borrowers
and thereby accordingly treats the concerned borrower as defaulter or not.
Mere non-payment of installment is not the case of default. The said
parameter is considered to decide on the same.
Delinquency - A borrower who is overdue in repaying one or more
installment by 30days is a delinquent borrower. In case the borrower catches
up by repaying overdue installments with the accrued IPD (Interest per Day)
for number of overdue days, he/she would be treated as a regular borrower.
However, at the final closure of a loan, if it were observed that a borrower
has delayed three or more installments, s/he would be treated as delinquent
for sanctioning a repeat loan.
Defaulter - A borrower who is overdue in repaying one or more installments
of an agri- allied or non-farm or general-purpose loans by 120 days or by
365 days in case of an agricultural crop or long-term loan will be treated as a
Willful Defaulter: A borrower who is in a position to repay the loan but
deliberately does not repay the loan or installments on time.

PROFILE: Name of the Borrower



Clothes Selling

Name of the Village

Power house colony

Loan Number


Loan Type




Loan Taken on

27th July10

Status of the Borrower

Not paid since 40 days

Borrower History

1st Time borrower



Product Code: 104

Borrower Name: Sunita

Village Name: Power house colony

Disbursed Amount


Repaid Principal


Repaid Interest


Repaid insurance


Total Repaid


Principal Outstanding


Interest Accrued




No. of Days Overdue

: 40

Cash Security Available

Other Charges Receivable

Interest per Day


Sunita is the reputed personality in the village and his credibility is also
good in the village, at the time of loaning cp of the individual was done
If we look towards his JLG member, the JLG consist of six member
1) Sunita (0005208)
2) Dholi Bai (0005206)
3) Basanti (0005204)
4) Sunita Bai (0005205)
5) Rama (0005207)
6) Gita (0005209)

All the JLG members except Sunita are paying their installment on regular
basis, because they people are affected by the willfulness of Sunita but they
are ready to pay their installment. Sunita is willful defaulter, when ever CSR
and concern FX visited his house she always committed to pay installment
but still not paying since 40 days.
If we look towards other aspect related to loan disbursement the date of
disbursement was 27th July 10 and after some time she used to create
problems for BASIX staff. Sunita is having no financial problem.
CRUX: Main reason behind is that no Police pressure by our company &
she thought company nothing do.
Reasons for Default

No police pressure.

What could have been done

Strict recovery process.

Pressurizing the JLG members by police from the beginning.

Police pressure on all members of JLG

Steps to be taken in future

Proper evaluation of cash flow.

Strict recovery process right from the beginning.

Clear communication about JLG responsibility.

Strong communication among mutual guarantors.

Strict monitoring and follow-ups as a regular process.

No loan should be given to the alcoholic person who is directly or

indirectly involved in the JLG.