CERTIFICATION

This internship report entitled “THE IMPACT OF LENDING AND

LOAN RECOVERY ON MICROFINANCE INSTITUTIONS”, by ATEH
KATHIANA NJI, matriculation nO BFI 24 A825AB meets the
requirements and regulations governing the award of the Higher
National Diploma (HND) in banking and finance by Divine Yard
Institute Souza under the tutelage of the Ministry of Higher
Education, hence approved for its contribution knowledge and
literacy presentation.

ACADEMIC SUPERVISOR HEAD OF DEPARTMENT

MR. WUZOH TEMCHE CARL

SIGN……………………………………… SIGN…………………………..

DATE………………………………………….. DATE…………………………….

PRESIDENT OF THE JURY

……………………………………………….

SIGN………………………………………..

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 DEDICATION
I wish to dedicate this piece of work to God Almighty for giving
me good health and knowledge. I give gratitude to my lovely
mother Madam FRI NDASI EMERENCIA and my family for their
financial and moral support.

ii

ACKNOWLEDGEMENT
The enormous effort, time, moral and other factors put in place
for the materialization of a report like this comes from several
persons who unfortunately cannot be all listed. However, all
those who contributed to the success of this study in one or
another are all great fully acknowledged.
My special thanks go to my supervisor MR. WUZOH TEMCHE
CARL for his time and constant supervision during the writing of
this report and to my school DIVINE YARD INSTITUTE SOUZA.
I owe gratitude to the manager of ALACCS SOUZA [Link]
KUH for his time and constant support during the internship.
My sincere thanks go to all the workers of ALACCS SOUZA for
their endless assistance and hospitality.

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ABSTRACT
The content of this report concerns the study of “THE IMPACT OF
LENDING AND LOAN RECOVERY ON MICROFINANCE
INSTITUTIONS” carried out by ATEH KATHIANA NJI in ALACCS
SOUZA for a period of one month.
This study was carried out to enable the intern to meet the
requirement of the HIGHER NATIONAL DIPLOMA (HND).

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 TABLE OF CONTENTS
TITTLE……………………………………………………………………………………

CERTIFICATION……………………………………………………………………. i

DEDICATION………………………………………………………………………..ii

ACKNOWLEDGEMENT…………………………………..………………………iii

ABSTRACT…………………………………………………………………………..iv

TABLE OF CONTENT……………………………………………………………. v

LIST OF FIGURES………………………………….……………………………….vi

LIST OF TABLES………………………………………………………………vii

LIST OF ABBREVIATIONS……………………………………………………viii

GENERAL INTRODUCTION………………………………………………………

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PART ONE: THE INTERNSHIP FRAMEWORK
This part comprises of two chapters: chapter one and chapter two, chapter one consist of general
presentation of the company, organization and operation of the company. Chapter two focuses on the
evolution of internship activities at the company.

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 CHAPTER ONE
GENERAL PRESENTATION OF THE ORGANIZATION
1.1 CREATION OF THE ORGINIZATION…………………………………..1
1.2 EVOLUTION OF THE ORGANIZATION………………………………….1
1.3 ORGANIZATIONAL STRUCTURE…………………………………………2
1.4 OPERATION OF THE ORGANIZATION….……………………………..
1.4.1 INTERNAL ENVIRONMENT OF THE ORGANIZATION…………
1.4.2 MICRO EXTERNAL ENVIRONMENT ……………….
1.4.3 MACRO EXTERNAL ENVIRONMENT……………………………..
CHAPTER TWO
EVOLUTION OF INTERNSHIP ACTIVITIES
2.1 THE RECEPTIONIST…………………………………………………….
2.2 THE CASH DEPARTMENT……………………………………………………
2.3 THE ACCOUNTING DEPARTMENT……………………………………….
2.4 THE MANAGEMENT DEPARTMENT……………………………………..
2.5 TASK CARRIED OUT……………………………………………
2.6 JUSTIFICATION OF TOPIC……………………………………….

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PART TWO: CONCEPTUAL FRAMEWORK
This part comprises of two chapters: chapter three and chapter four, chapter three consist of the best
management practice of training on the topic THE IMPACT OF LENDING AND LOAN
RECOVERY IN MICR FINANCE INSTITUTIONS case of ALACCS and methods of data
collection with analytical tools and presentation of results. Chapter four focuses on the critical
approach, problem relating to the topic, difficulties encounter by the intern and some possible
recommendations.

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 CHAPTER THREE
BEST MANAGEMENT PRACTICES OF TRAINING
3.1 CONCEPTUAL FRAMEWORK………………………………………………..
3.2 DATA COLLECTION…………………………………………………
3.3 ANALYTICAL TOOLS…………………………………………
3.4 PRESENTATION OF RESULTS…………………………………………….
CHAPTER FOUR
CRITICAL APPROACH
4.1 PROBLEMS………………………………………………………………………..
4.2 MANAGERIAL PROBLEMS FACED BY ALACCS……………………….
4.3 DIFFICULTIES ENCOUNTERED BY INTERN……………………………
4.4 RECOMMENDATIONS…………………………………………………………
4.4.1 RECOMMENDATIONS TO ENHANCE TRAINING……………………
4.4.2 RECOMMENDATIONS TO THE MANAGEMENT……………………
4.4.3 SUGGESTIONS TO OVERCOME DIFFICULTIES FACED BY
INTERNS…………………………………………………………………………………
GENERAL CONCLUSION…………………………………………………..
REFRENCES………………………………………………………………………
APPENDICES………………………………

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LISTS OF TABLES AND FIGURE

Figure 1. Organizational structure of ALACCS SOUZA.

Table 1. Types of loans issued in ALACCS SOUZA.

Table 2. Individual account in ALACCS SOUZA.

Table 3. Customer Response

Table 4. Customer Response

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LIST OF ABREVIATIONS

MFI: Micro Finance INSTITUTIONS

HND: Higher National Diploma

ALACCS: Alamandum Community Credit and Savings

QCS: Quality Customer Services

NID: National Identity Card

BOD: Board of Director

AGM: Annual General Meeting

ATM: Automated Teller Machine

CAMCCUL: Cameroon Cooperative Credit Union League

COBAC: Central African Banking Commission

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 BACKGROUND OF STUDY
Micro finance is not a new concept. It is dated as far back as the 19 th century when money lenders where
formally performing the role of new formal financial institution. These institutions constitute villages,
banks, corporate credit union, state banks and social ventures capital finds to help the poor. These
institutions are those that provide savings and credit services for it members including other businesses
ventures.
The MFI’s worldwide has been recognized as an instrumental tool for poverty alleviation and economic
growth. There are socio economic transformation effort of low income and poor community has been
possible through accessing semi-formal and informal financial products and services. The pivotal role of
MFI’s has helped foster the growth and development of business’s in the world by providing start up and
business expansion capital among other financial services. These institutions provide savings and credit
services for businesses. They mobilized savings and have simple and straight forward procedures that
originate from local cultures and are easily understood by the population.

STATEMENT OF THE PROBLEM

ALACSS SOUZA like other financial institution of category 2 is out to make profit, help its members
and customers by providing loan to them to start up their business or increase their capital, help in
poverty alleviation.
High interest rates on micro loans turns at times to discourage people and enterprises from getting loans,
lack of collateral securities, lack of finance and also business failures All this problems makes lending
and loan recovery procedure very difficult which lead to the topic “THE IMPACT OF LENDING
AND LOAN RECOVERY IN MICROFINANCE INSTITUTIONS”.

OBJECTIVE OF THE STUDY

Main objective of the study

 To analyze the effect of lending and loan recovery on the growth of MFI Souza

SPECIFIC OBJECTIVES
 To evaluate the relationship between members and the financial institution.
 To make recommendation based on the findings.

METHODOLOGY
In order to realize the objective of the study, the intern carried out some research which was done through
primary and secondary means of data collection.
PRIMARY DATA involves the use of questionnaires interview purposely designed by the researcher to
generate information on how to manage loans. This is also referred to as first-hand information because it
is gotten from the source.
SECONDARY DATA on the other hand involves series of consultation of related articles, documents,
exploitation of textbooks, the internet, manual reports, past report comprising of all forms of records with
other sources.

STRUCTURE OF THE WORK

The work is made up of two main part that is part one which is internship framework made up of chapter
one and two which is all about the organization that is, its creation, structure, its activities, products and
services, internship activities. In addition to this, part two which is conceptual framework made up of
chapter three and four is all about management practices, data collection, recommendation and
conclusion.

CHAPTER ONE
 GENERAL PRESENTATION OF THE COMPANY
Chapter one (1) is divided into two sections. In which section one is all about the creation and historical
evolution of the company and section two which is all about organization and operation of the
company.
SECTION ONE: CREATION AND HISTORICAL EVOLUTION OF THE
ORGANIZATION
1.1 CREATION OF THE ORGANIZATION
ALACCS fully known as ALAMANDUM COMMUNITY CREDIT AND SAVINGS PLC is a
category two MFE which is regulated by COBAC and MINFI. It was created in 2008 as a small Njangi
group in Mankon Bamenda.
1.1.1 Vision, Mission and Objectives of ALACCS
The cooperative mission is to provide savings and credit facilities as well as other cooperative financial value to
individuals, cooperative bodies and governmental organizations to further the socio-economic growth of
Cameroon. Most importantly the credit union strives to become one of the leading financial service providers in the
sub region in term of transparency, confidence; quality customer services (QCS), good cooperative governance and
preserving its goodwill. The core value of the union is; provision of rapid quality services, respect of customers,
flexibility and innovation, description with information, team spirit and dynamism.
Other missions of ALAMANDUM COMMUNITY CREDIT AND SAVINGS SOUZA are;
 To improve the economic and social wellbeing of members by encouraging Regular savings, Wise Borrowing
and Prompt Repayment at reasonable interest rates.
To provide members with loans for the purpose of providence.
 To provide high quality financial saving and other products
To enjoy the progress of its members by educating them continuously on the proper use of money.
To practice the value of equality, equity and social concern of the community. The credit union shall not be for
profit making but its objectives are;
To encourage its members to make regular savings by providing them with possibilities.
To provide their members with loans for the purpose of production.
To enjoy the progress of its members by educating them continuously on the proper use of money.
To foster the economic and social well-being of members with low interest rate.
1.2 HISTORICAL EVOLUTION OF ALACCS
ALACCS fully known as Alamandum Community Credit and savings PLC is a category two MFE which is
regulated by COBAC and MINFI. ALACCS was created in 2008 as small “Njangi” small schemes and some
telecommunications technicians of the telephone exchange in Bamenda where the head office is found. They felt
the need to put money away from a rainy day. The Souza branch was created in 2010 with Mr. Che as the manager.
They did not know how to operate a real banking system so they invented savings technique by creating
“njangi”group which did not prove very efficient, the idea of transforming this “Njangi” group into a more
efficient and reliable financial house the credit union was brought about by madam Maxceline who just returned
from a trade union meeting in Nigeria and Mr. Che of the automatique telephone exchange. This idea was nurtured
and hatched in November 2009. When this small “Njangi” group was given the authorization to effectively launch
its operational activities as a credit union and was christened the ALA Cooperative credit union. As the new
monetary union gathered steam, there was the need to elect its pioneer’s executive. Consequently, Madam
Maxceline Nche was elected the pioneer chairlady, Mr. Njoh Gabriel the secretary general, Mr. Elad the treasurer
and then Pa Orock as the new executive diligently carried out their benevolent duties, and the union drew the
attention of top management of post and telecommunication like Directors and Chief of services
who also joined the credit union and provided space and furniture for the union to forge ahead. In 2015, like little
drops of rain which make up the mighty ocean, its capital rose to about 14million CFA Francs solely managed by
telecommunications technicians. In order not to make it a solely ALACCS affair, the Alamandum Cooperative
credit union opens its portals to the public and other government department in 2015 where ALACCUL was
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Changed to ALACCS. By this time its capital has grown to 100 million CFA Francs. Taking up a post of
responsibility as a board member was benevolent and election to any post was during an Annual General Meeting.
The cooperative union works with the Motto: SAVE REGULARLY, BORROW WISELY AND REPAY
PROMPTLY. With branches in Bamenda, Souza, Melong, Douala, Yaounde, Mbanga and a collecting center in
Alamadum village. ALACCS is also partners with crystal cash, Smobilpay, Western Union, Point Touch, MTN
and Orange Mobile Money.

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SECTION TWO: ORGANIZATION AND OPERATION OF THE
COMPANY
1.3 Organizational Structure of ALACCS

Source: ALACCS Library

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POSTS AND RESPONSIBILITIES
the General Assembly : this body is made up of all members of the credit union. They play a great role in
the smooth running of the credit union. Again, they elect the BOD, Supervisory Board, Women Committee, Youths
Committee by general voting of one man one vote and spell out the term of office which is stipulated in the by-law.
Furthermore, they meet once or twice a year during educational meeting called Annual General Meeting (AGM). They
create police which are forwarded to the BOD for implementations. Moreover, they approved budget to run the
organization for the financial year. Finally, they approved reports presented by management and debated upon to achieve
result.
Board of Directors: The BOD is made up of seven members. They are elected by the General Assembly. To
be a member of the BOD you must meet up with the following qualifications:
1. You must have at least 1.5million in your account
2. You must not have been delinquent
3. The member of the board must have no criminal records
4. A staff cannot stand to be elected as board member
5. He or she must be related to any ordinary member.
The BOD is in charge of the following functions;
1. They are principally in charge of governing, coordinating and directing the affairs of union in line the low and
regulations governing category one micro finance establishments.
2. They present report to the members, proposed budget for the financial year, hold board meetings every month and
records presented to the management.
3. They take immediate decision, implement policies and law approved by the general assembly, carryout recruitment of
staff and monitor them in their level of activities.
4. They forward information to CAMCCUL concerning the union.
5. They take decision on immediate issue which needs to be addressed in a particular situation.
Supervisory Board: They are the “eye” looking at the credit union and report to the General Assembly an
area which needs to be redressed. They attend Board Meetings deem necessary to present reports on area which is to be
verified. They check transactions mostly; expenditure and income carried out by the staff, loan forms and registers and
question the management to clarify time unworthy.
Women Committee: It mobilizes women and influences them to participate in cooperative union
movement5 by encouraging more women to save money; it is elected by the General Assembly for the promotion and
sensitization of women member of the union. They also represent the union in international women’s day.
Youth Committee: On like the Women Committee, the Youth Committee is out to encourage youth to
consume the services of the union in other to alleviate poverty in the society since youths are the future leaders.
General Manager: He is someone who oversees the activities of the credit union. He manages the day-today
running of the union and regards to the management on the affairs of the union. He channels the problems of other
branch manager to the BOD and links the branch manager to the BOD if need be. He makes sure that CAMCCUL and
COBAC laws are fully respected. He prepares financial statements at the end of the year for report. He makes sure that
loan are granted according to the loan policy ensures that delinquent member are notified; give financial counseling to
members and o on the sport members education and promotion.
Internal Controller: He is responsible for the checking of the operating system for any deficiency and
producing reports. He is also responsible for developing and implementing ways through which the union can detects
error and fraud. They produce reports on finding of internal issue. Their reports are presented to the BOD or the manager
depending on who designated the internal controller.
Branch Manager: He is in charge of the running and the functioning of the union. Everyone working in that
branch reports to the branch manager as the heads of the branch. The Branch Manager does not work in isolation but
work in liaison with the head office which overall and supervises the operation and functioning of the branch.
Loan Officer: He/she is responsible for the granting and recovery of loans to members who satisfy all loans
granting condition. He directly reports to the accountant and the manager. He coordinates with all the
Staff and management. He reports on the loan portfolio orientates and counsel’s members and also follow up the
recovery of loan.
Accountant: He is the financial analyst of the credit union and he comes after when all other transaction has
been carried out. He is responsible for all the accounting operations of the union. He oversees the daily recording of
transaction and bookkeeping activities. He reports to the manager and supervises the account clerk, take care of the
accounting records; update the ledger account pays taxes, social insurance contribution and collection agent and cashier.
He reconciles all the other transaction with the member and other branches. Page 4

Account Clerk: The account clerk is an individual who, carries out the entire daily recording of
the union, record all the daily transactions in the cash receipt and payment of voucher book list. He
or She prepares the pay roll, remunerations documents, new members for admission, provides first
 hand education to new members and attends to members at the counter.
The cashier /Teller: He/she is the only person who receives and makes payment over the
counter. In term of receiving money, he/she receives money from the members who wants to keep
money in their account like Saving Account, Deposit Account, Transfer of Money that is through
Western Union and Payment of loan debt. He ensures proper calculation of money received or paid
out immediately and posts into the passbook and individual ledger account.
Security Guard: These are people whose responsibility is to secure the credit union and when
this is done, members and potential members feel secured and will therefore continue doing g
business with the union.
Cleaner: These are people responsible for keeping the environment of the credit union clean.

1.4- THE OPERATION OF ALLACSS

Here, we will be looking at the operations of the company and the organizational activities that create a unique
value and helps achieve mire objectives. Operations play a distinctive role that contributes towards the overall
success of the organization.
1.4.1- THE INTERNAL ENVIRONMENT OF ALACSS SOUZA
 CUSTOMERS
A customer is any person, individual or organization who might have interest in buying or has bought products and
services from a company or an institution. We all known that customers are at the center of an organization, thus
organisati8ons should focus on meeting customers expectation and satisfaction. So for this reason, ALACSS offers
a quality products and services to its customers at competitive prices there by gaining customers loyalty.
 HUMAN RESOURCE
Human resources are the employees and labour working in the organization. Human resource is the crucial assets
to an organization. The success of an organization depends on the management capacity of its human resource. The
human resource of ALACSS is made up of the staffs which include the manager, loan officers, accountant, cashier
and others.

 PHYSICAL RESOURCES
The physical resources of a business are the material, assets owned by the company which is used towards the
achievements of their goals. They include; machinery equipment, funds etc. ALACSS physical resources are funds,
they collects savings from their customers who help fund most their activities, computers, printers and others.

 FINANCIAL RESOURCES
The financial means available in the institution are gotten from the sales of articles like loan form, pass books,
cheques booklet and others. During my internship, the institution was sometimes assisted financially which permits
it to finance its daily expenses.

1.4.2- THE MICRO EXTERNAL ENVIRONMENT

The micro external environment of ALACSS comprises of its strength, weaknesses, opportunities and threats also
called the SWOT Analysis.

 STENGTH
ALACSS offers low interest rates on loans granted to support customers and members various activities and
businesses.
There exist team spirits staffs of ALACSS which has contributed to achieve their goals.
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There exists efficient connection within the different branches of ALACSS all over the national territory through
the use of internet.
ALACSS has experience staffs which increases its efficiency.
  WEAKNESSES
Language barrier between some customers and the staffs, since many documents and the most spoken language is
in French and documents in the institution are not translated in both languages. Hence, English speaking customers
and interns face a lot of difficulties.
Due to regular network failure, work is slow down and recording are done manually leading to waste of time and
open mistakes.
Since the products and services are being sold in area of high market domination and competition among other
institutions, it’s not easy to satisfy all the customer’s needs as there will be competition.
The presence of only one security guard exposes the institution to danger such as robbery.
 OPPORTUNITIES
Due to low interest rate granted on loan, ALACSS has the opportunity to increase its customers.
The existence of team spirits among staffs facilitates the spread of work load of the institution.
ALACSS has ten (10) branches which facilitates access to the micro finance all over the national territory.
ALACSS has opportunities of discovering more skilful employees by accepting interns for internship in the
institution.
 THREATS
Due to language barrier between some customers and staffs and also the failure to translate documents in both
languages can push customers to other institution where they will face no difficulties.

Due to the instability and slow down of work due to network failure, it may chase away impatient customers.

The products and services of the institution are being sold in an area where there is market domination and stability
leading to high competition from other financial institution.

Due to the presence of only one security guard, can open the institution to any form of attack such as robbery.

1.4.3- THE MACRO EXTERNAL ENVIRONMENT

ALACSS is influenced by the following external factors. They are classified under the PESTLE Analysis
(political, economic, socio-cultural, technological and legal factors)

 POLITICAL ENVIRONMENT
These are political pressures, regulation, government policy, monetary and fiscal policies implemented by the state
such as government tax levied on institution. This in turn influence CEC CAMEROUN SA by implementing
moderates taxes on their products and services.

 ECONOMICAL ENVIRONMENT
Economic factors that influence ALACSS consist of variable such an interest rate, fiscal and monetary policies,
adequacy of funds. All this variables plays a vital role in ALACSS for example, an increase in interest rate will
discourage borrowings and thud lead to a fall in profitability as well as influencing customers perception.

 SOCIO – CULTURAL ENVIRONMENT

It’s made of beliefs, behaviors and the ways of life, which will influence ALACSS marketing decision or activities
if the forms. The culture within any society is the complex elements that reflect the society’s beliefs and values,
perceptions, preferences and behavioral norms. These elements of culture express themselves in people altitude
and in their general life style. ALACSS can respond by adapting the product it offers to the needs of customer’s
taking into consideration the culture and social influence of the market.

Page 6

 TECHNOLOGICAL FACTORS
Technology is the touch stone of economic progress for any institution. ALACSS has invested in
technology as the institution is able to send and receive money worldwide and equally improve in
software.

 LEGAL FACTORS
These are laws that govern the market in which ALACSS operates in. These laws are put in place by
government and governing bodies such as COBAC and others. These laws must be respected and
followed by ALACSS

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 CHAPTER TWO
EVOLUTION OF INTERNSHIP ACTIVITIES AT THE ORGANIZATION
SECTION ONE: PRESENTATION OF THE SERVICE HOSTING AT THE
ORGANIZATION
ALACCS acknowledge the presence of all interns in the union by welcoming them with educational
purposes and participating in their achievement of educational goals by providing necessary practical
exercises in the union.

2.1 The Receptionist: On the 13th of February 2024, was a very special day for us because
that day was the beginning of our long-awaited internship to see what it is like to work in a group at the
work place? Upon our arrival at ALACCS, we were welcome by the secretary also known as the
receptionist or customer service. Who is in charge of the reception of interns, after individual
presentations, she took us round the cooperative environment and showed us their structure. We were
then presented to other personnel in the union and introduced to their various offices after which we were
shown our office reserved for interns by the manager. This department is in charge of reception of
members/directives, creation of accounts, updating accounts and filling documents.

2.2 The Cash Department: This department handles the movement of cash in and out of
the union. Again, it also detects bank notes, cash reconciliation and filling cash receipt.

2.3 The Accounting Department: In this department, we were briefed on the activities
carried out in this section which are updating individual/General ledger accounts, reconciliation of inter-
branch account, cheque clearance, preparation of financial statements and financial report.

2.4 The Management Department: This department is in charge of controlling all the
other departments of the institution. Furthermore, he presents a monthly, quarterly, semester and annual
report to the board of directors. He also prepares financial statement and interprets the report. Finally, he
is the supervisor of staff.

Page 8
SECTION TWO: EVOLUTION OF INTERNSHIP ACTIVITIES IN
ALACCS
Our activities in ALACCS changed on a weekly basis in each department in the union from the 13th of
February to the 13th of March 2024. Each week came with a new activity and a different task to perform
as will be demonstrated below:
2.5 ACTIVITIES CARRY OUT IN ALACCS
2.5.1 the Member Service Department: In this department, we were taught how to welcome
members and non-members in the union. Also, assist members in filling their cash deposit, cash
withdrawal and money transfer form. Again, to give formalities on how to become a member in
ALACCS, we learned how to create an account and update member’s passbook in the union. We also
learned how to file documents chronological in the various file 13th to 17th February 2024 to those who
want to become members of the union. Furthermore, we were taught on how to check individual ledger
account of members and correct the irregularities if any and how to update members‟ passbook. Finally,
how to file documents chronological in the various files week two 19thto 24th February 2024.
2.5.2 The Cashier Department: This department handles the movement of Cash in and out of
the union. We were taught how to pay members of the union, salary earners and pensioners. We saw how
receipts of member’s accounts are being kept and the member goes along with his or her own receipt.
How money is being arranged and counted. Again, how to reconciled cash which was done by adding the
opening balance to the cash pay in for that day. Then subtraction of cash pay-out was also done. Also,
checked if the balance system matches with the physical cash. Furthermore, we learned that when a
member withdraws money, he or she is given the duplicate receipt but when the money is being
deposited, they are given the original copy to go with. We learned how to send or receive money by the
use of alpha software. Also, how to detect bank notes by checking if it a counter fit or not. We also
learned how to reconciled cash balances. Documents like, the receipt of payment and deposit of every
transaction orderly and withdrawal especially from savings account. Week three 26th to 3 th March 2024.
2.5.3 The Loan Department: This department is the core department of ALACCS which deals
with the granting and recovery of loans. In this department, we were taught how loans are granted to
members and how collaterals are being evaluated and how to forward loans above 500, 0000 FRS. Also,
how to fill the loan application form and how to create account for new members manually and using the
union’s software. The intern was taught how to grant loans to members, the principle before any loan is
granted and what loan delinquency is all about. Again, the way or method of analyzing a member
application whether or not the loan should be granted by the use of 5Cs of lending and. The intern was
also taught that loan taken within savings attract an interest charge of 1.75% per month. We gained
experience on how collateral were being evaluated and how to fill loan applications forms. Also learned
the various types of loans that may be granted to members and the interest rates charged on them. The
Intern also learned how to process loans to members of the union that is by assessing the members using
the 5Cs of lending. We learned how to calculate the loan Amortization table by using the union software.
Lastly the constitution of a good loan application. The outstanding balance. Interest above savings
attracts an interest rate of 2% per month. The intern was taught on how to calculate the loan Amortization
of members, calculate the provision of doubtful and bad debt. To also know when a loan is written off
and the types of loans offered by the union. Week four 5thto 10th March 2024.
2.5.4 The Accounting Department: This department identifies analyses, measures, and records and
communicates information to respective users for effective decision making. It deals with post entry into the
system that deals only with the back office expenses. The intern was taught how to post transactions; which are
receipts, withdraws and loans into the pass books and ledger of members. The intern was taught how to handle
inter-branch transaction of the union. The interns educate and direct members and nonmembers on the services
offered and how to go about their operations. The accountant we learned that this department deals only with what
concern the back office and it is where most financial transactions take place. We also learned how to
records transactions using the union software.
Page 9
The intern learned that ALACCS clear only certified cheque. We learned the various conditions to check
before clearing a cheque. Taught us briefly how he prepares the income statements and extracts
information to prepare the statement of financial position of the Credit union for that month. According
to him, he prefers to carry out this activity monthly in order to keep track of the business situation. We
were taught by the accountant how to clear a cheque Week five 11 to 13th of MARCH 2024.
2.5.5 The Branch Manager Department: We were taught on how to prepare the income
statements monthly and how to report the result. He also taught us how to supervise staff of the union we
learned how income statements are prepared using the union software.

Source: ALACCS File

2.6- JUSTIFICATION TOPIC

The intern was opportune to work in different departments at ALACSS during the internship
period especially in the customer and loan departments.
During the period of internship, there was no day in the institution where new accounts where not
open to encourage savings and loan not granted either to start up a business or play a major role
in economic development in the country including African countries and our Cameroon country
where MFI’s give out loans to both its customers and members to finance their activities and also
reduce the level of poverty in the society and encourage new businesses to grow up. This study
will be looking at the IMPACT OF LENDING AND LOAN RECOVERY IN MICROFINANCE
INSTIUTIONS case of ALACSS SOUZA.

Page 10

PART TWO
 CONCEPTUAL FRAMEWORK
This part comprises of two chapters: chapter three and chapter four, chapter three consist of the

best management practice of training on the topic THE IMPACT OF LENDING AND

LOAN RECOVERY IN MICRO FINANCE INSTITUTIONS case of ALACCS

SOUZA and the methods of data collection with the analytical tools and presentation of results.
Chapter four focuses on the critical approach, problems relating to the topic, difficulties encounter
by the intern and some possible recommendations.

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 CHAPTER THREE: BEST
MANAGEMENT PRACTICES OF THE
TRAINING
This chapter is made up of two sections in which section one we are going to elaborate on the conceptual
framework and section two which comprises of data collection, analytic tools and presentation of result

SECTION ONE: CONTEXT AND BEST PRACTICES OF TRAINING

3.1- CONCEPTUAL FRAMEWORK

3.1.1- CONCEPTUAL DEFINITIONS OF TERMS

Definition of loan: According to Kumar et al, (2002). Loan is an arrangement of advancing a sum
of money on interest for a pre-agreed period sometimes for a particular purpose as well. The main
features of loan advanced by a MFEs are the MFEs sanctions a sum of amount as loan for (a) prearranged
period and (b) at an agreed rate of interest, a separate. Loan account is opened in the name of borrower
with the amount of loan sanctioned, the loan sanctioned has to be taken in full and not partially as the full
amount is transferred to the debit side of the account and starts bearing interest from the date of entry in
the debit side, from his loan account the customer is allowed to transfer the amount to his current
account, installment repayment of loan is not permitted. But relaxation depends on the bank’s discretion.
Mithani et al, (2008). The main business of a banking company is to receive deposits and lend money.
Receiving deposit involves no risk, since it is the banker who owes a duty to repay the deposit whenever
it is demanded. On the other hand, lending always involves much risk because there is no certainty of
repayment. But, a banker earns a bulk of his income only through lending. A banker should be very
cautious in lending because he is not lending money out of his own capital. A major portion of the money
lent comes from deposits received from the public. These deposits are mostly repayable on demand.
Guttentag, 2007 In finance, a loan is the lending of money from one individual, organization or entity to
another individual, organization or entity. A loan is a debt provided by an entity (organization or
individual) to another entity at an interest rate, and evidenced by a note which specifies, among other
things, the principal amount of money borrowed, the interest rate the lender is charging and date of
repayment. A loan entails the reallocation of the subject asset(s) for a period of time, between the lender
and the borrower. Loan is generally provided at a cost, referred to as interest on the debt, which provides
an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions
are enforced by contract which can also place the borrower under additional restrictions known as loan
covenants.

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.
Factors that make a borrower eligible to enjoy a credit facility from lending

banks: Reed and Gill. (1985). some of the factors that affect the ability of a borrower to repay a loan
are very difficult to evaluate but they must be dealt with as realistically as possible in preparing financial
projections. This involved looking in to the past record of the borrower as well as engaging in
economized forecasting. Furthermore, they suggest that there are the ingredients that determine the
lending officer’s faith in the debtors‟ ability and willingness to pay the obligation in accordance with the
terms of the loan agreement. Some writers like Sheker (1982) classified the factors in to 5 C‟s.

Capacity (Repayment Ability/Borrowing Capacity): Capacity of a borrower requires two

aspects to be assessed. First, borrower must have legal capacity to borrow. For example, banks will not
lend to minors. An assessment of the “financial capacity” of a borrower is relevant in ascertaining the
repayment ability of a borrower (Sonali, Abeyrante, 2001). [Link] and [Link] (1985) also added that
Banks are
interested not only in the borrower’s ability to repay but also in his or legal capacity to borrow .Banks
make few loans to minors since they can disaffirm at a later date unless the proceed of the loan are used
for essential purpose when a loan is made to a minors. A parent, guardians or other person of legal age is
usually asked to cosign the note.
Character (Human /Management Factor): Character of a borrower plays an important role
in the credit assessment process. A lending bank will look in to a borrower’s past record, its banking
operations, integrity and reputation to establish his character (Sonali, Abeyrante, 2001). Reed and Gill
(1985) stated that the concept of character definition relates to credit transaction which means not only
willingness to repay debt but also a strong desire to settle all obligations within the terms of the contract.
A person character usually possesses attributes such as honesty, integrity and morality but character is
difficult thing to evaluate. It is entirely possible for a person not to have all these qualities but still wish to
repay financial obligations. Character worthy of credit is largely
function of a person’s honesty and integrity. Clemens (1989) also addressed character as “the banker
should have complete confidence in the integrity and ability of the customer to use the money to
advantage and to repay it within a reasonable period. In the absence of such confidence it is preferable to
decline to lend, no matter how much security may be available. Every banker needs to fix in his mind a
clear picture of the ideal customer. This is true when the manger has known the customer well and has
been personally dealing with him over many years. Sinkey, Joseph (1996).Ibid (1996) also noted out that
factor such as management goals, objectives and motivations need to be addressed. In a business loan
assessment, adequate financial, technical and business management ability needs to be analyzed critically
before making decision.

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Capital (Financial position): Capital is the amount of funds invested by the borrower in a
business to support both fixed asset and current assets in other words it described as „net worth support‟
(Flesig, 1995). Banks should make sure that every borrower has sufficient equity to enable the creditors
to recover their funds through the sales of assets other than the collateral pledged for the loan.
„The equity of a company is an important factor to consider if the potential borrower is small business
and also new to a bank, or where the business is relatively new. In the first few years of a small business
it will usually have little or no retained earnings, and very little external financial help. It would,
therefore, have to rely on its own capital in the event of externally imposed challenges such as interest
rate fluctuations, inflation and changes in market conditions‟ (Sonali, 2001).

Condition (Economy): Economic conditions affect the ability of the borrowers to repay financial
obligations but are beyond the control of the borrower and the lender, according to Shaker (1982).In
addition Ibid (1982) stresses that economic conditions make up the environment within which business
units and individual operate, therefore, he noted out that the loan officer must become an economic
forecaster. Market conditions as well as social and economic conditions, affect a potential borrower’s
business activities. It is quite possible that a borrower may satisfy all the other elements of credit
assessment but if the potential borrower were engaged in a business that has an uncertain market, lenders
would be reluctant to advance the money. A prudent lender will always closely study the prevailing
conditions in a county before granting a loan.

Collateral (Security): Collateral is not mandatory in the securing of a loan. Lenders, however, will
favor the availability if in the bank’s view; there is an element of doubt as to the repayment capacity of a
borrower. The amount of collateral that is taken must reflect that element of doubt (Sonali, 2001).
Collateral refers to the particular assets of the firm that the bondholders receive if the firm defaults on the
bond/loan (Barrow and et al 1981).Loans are frequently secured by assets of the borrowers, most cars, for
example are purchased on credit and automobile serves as collateral for the loan. Security is taken in
most instances to strength a weakness found in one or more of the credit factors such as ability to create
income

Principles of Good Lending Policy: According to Bedi&Hardikar (1993) when evaluating

loan requests, bankers can make two types of errors. The first is extending credit to a customer who
ultimately defaults; the second is denying a loan request to a customer who ultimately could repay the
debt. In both cases, banks loose a customer and its profits. To minimize such errors and prevent problems
of loans before their occurrences, there are few general principles of good lending that should be noted
while considering an advances proposal. These include safety, liquidity, and purpose of loan proceeds,
profitability and diversification.

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Safety: the most important principles of good lending. When a banker lends, he must feel certain
advances is safe. That is the loan is certainly collectable. If for example, the borrower invests the money
in unproductive or speculative venture or if the borrower himself is dishonest, the advance would be in
problem. Similarly if the borrower suffers loss in his business due to his incompetence, the recovery of
the money may become difficult. The banker ensures that the money advanced by him goes to the right
type of borrower and is utilized in such a way that it will be safe at the time of lending but will remain so
throughout and after serving useful purpose in the trade or industry where it is employed, and is repaid
with interest.
Liquidity: May simply defined as the ability of bank to convert to a sufficient amount of assets in
cash readily and at favorable price to satisfy at any time both the normal and abnormally high withdrawal
demand of its operation. A bank is said to be liquid if it has immediate access to funds at reasonable cost
precise time as the funds are needed. In order to ensure liquidity of the bank, it is necessary to check
liquidity of the loan to be granted. Therefore, it is not enough that the money will come back, it is also
necessary that it must be collected on demand or in accordance with agreed terms of repayment. The
borrower must be in a position to repay within a reasonable time after demand for repayment is made.
This can be possible only if the money is employed by the borrower for short-term requirement and not
locked up in acquired fixed assets, or in schemes that take long time to pay back. The source of
repayment should be definite. The reason why bankers attach much importance to liquidity as to safety of
their funds in that bulk of their deposits is repayable on demand or at short notice.
Purpose of the loan proceeds: Another principle of good lending that must look in to the
purpose of the loan proceeds. The range of business loan needs is unlimited. Firms may need cash for
operating purpose to pay overdue suppliers, to make a tax payment or pay employees salary. Similarly
they may also need funds to pay off debt obligations or to acquire new fixed assets. Frequently a firm
recognizes business operating purposes, including seasonal and permanent of working capital needs, for
the purchase of depreciable assets, physical plant expansion, acquisition other firms, and extra ordinary
operating expenses.
Profitability: Like other commercial institutions, banks must make profits. Firstly they must have to
pay interest on deposits received by them. They incur expenses on establishment, rent, stationery, etc.
they make provision for depreciation of their fixed assets and also for any possible bad or doubtful debt.
After meeting all these items of expenditure, a reasonable profit must be made, otherwise it will not be
possible to carry anything to be reversed or pay dividends to shareholders.
Loan repayment: Loan (credit) repayment is the loan amount clients installed within the reporting period.
Loan repayment will consist of loan principals and interest. Loan repayment will be effected
Based on the agreement entered between the bank and the client. MFE encourages timely repayment. To this end,
it requires to make the borrower aware of the advantage of paying loan on or before due date. The relationship
between the borrower and the lender is important. The more distance the lender is from the borrower, the less
control the lender has over the repayment of the credit (Shekhar,1993). Lending decision is made on sound credit
risk analysis /appraisal and assessment of creditworthiness of borrowers. But past records of satisfactory
performance and integrity are no guarantee future, though they serve as useful guide to project trend in
performance. A loan granted on the basis of sound analysis might go bad because of the borrower may not meet
obligations per the terms and conditions of the loan contract. It is for this reason that proper follow up and
monitoring is essential. According to the National Bank of Ethiopia, monitoring or follow-up deals with the
following vital aspects: Ensuring compliance with terms and conditions Monitoring end use of approved funds
Monitoring performance to check continued viability of operations Detecting deviations from terms of decision
Making periodic assessment of the health of the loans and advances by nothing some of the key indicators of
performance that might include: profitability, activity level and management of the unit and ensure that the assets
created are effectively utilized for productive purposes and are well maintained. Ensuring recovery of the
installments of the principal and term interest in case of loan as per the scheduled repayment program Identify
early warning signals, if any, and initiate remedial measures thereby averting from possible default. Basically
there are three types of loan follow up systems. These are: Physical follow up, financial follow up and legal
follow up (NBE Directives, 2010). Each is discussed in section that follows:
Page 15
Physical Follow –up: Physical follow-up helps to ensure existence and operation of the business,
status of collateral properties, correctness of declared financial data, quality of goods, conformity of
financial data with other records ( such as taxes ,register books), availability of raw materials, labor
situation, marketing difficulties observed ,undue turnover of key operating personnel, change in
management setup among others.
Financial Follow- up: Financial follow up is required to verify whether the assumptions on which
lending decisions was taken continues to hold good both in regard to borrowers‟ operation and
environment, and whether the end use is according to the purpose for which the loan was given.
Legal Follow- up: The purpose of legal follow up is to ensure that the legal recourse available to
the Bank is kept alive at all times. It consists of obtaining proper documentation and keeping them alive,
registration, proper follow up of insurances. Specific issues pertaining to legal follow up include:
ascertaining whether contracts are properly executed by appropriate persons and documents are complete
in all aspects, obtaining revival letters in time (revival letters refer to renewal letter for registration of
security contracts that have passed the statutory period as laid down by the law), ensuring loan/mortgage
contracts are updated timely and examining the regulatory directives, laws, third party claims among
others.
Causes of loan default: According to Ahmad, (1997), causes of loan default include; lack of
willingness to pay loans coupled with diversion of funds by borrowers, willful negligence and improper
appraisal by credit officers. In addition, Hurt and Fesolvalyi (1998), cited by Kwakwa,(2009) found that,
corporate loan default increases as real gross domestic product decline, and that the exchange rate
depreciation directly affects the repayment ability of borrowers. Balogun and Alimi (1988) also identified
the major causes of loan default as loan shortages, delay in time of loan delivery, small farm size, high
interest rate, age of farmers, poor supervision, non profitability of farm enterprises and undue
government intervention with the operations of government sponsored credit programmers. Moreover,
Akinwumi and Ajayi (1990) found out that farm size, family size, scale of operation, family living
expenses and exposure to sound management techniques were some of the factors that can influence the
repayment capacity of farmers. According to Olomola (1999), loan disbursement lag and high interest
rate can significantly increase borrowing transaction cost and can also adversely affect repayment
performance. After surveying different banks in India, Berger and De Young (1995) identified the main
causes of default of loans from industrial sector as improper selection of an entrepreneur, deficient
analysis of project viability, inadequacy of collateral security/equitable mortgage against loans,
unrealistic terms and schedule of repayment, lack of follow up measures and default due to natural
calamities. The study conducted by Okorie (1986) in Ondo state in Nigeria revealed that the nature, time
of disbursement, supervision and profitability of enterprises, contributed to the repayment ability and
consequently high default rates. Other critical factors associated with loan delinquencies are: type of the
loan, term of the loan, interest rate on the loan, poor credit history, borrowers‟ income and transaction
cost of the loans. Okpugie (2009) also indicated that, high interest charged by the microfinance
institutions has been discovered to be the reason behind the alarming default. This was also confirmed by
Vandel (1993), who also found that high interest rates charged by banks tend to facilitate default by
borrowers.

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SECTION TWO: DATA COLLECTION, ANALYSIS AND
PRESENTATION OF RESULTS
3.2- DATA COLLECTION
In this study, data collection methods were done through interviews, questionnaires and documentary
source. Two sets of data were employed for the empirical analysis that is primary and secondary data.
PRIMARY DATA
The study used primary data simply because it was fresh data collected for the first time, not processed
and helped to come out with current information processed. Primary data collected for the first time to be
used in solving the specific problem under study.
The primary data were collected through field structured questionnaires administration and interview.
Interview technique was used to interview the loan officer of ALACSS. A set of questionnaire was
administered to some borrowers. Through this questionnaire the researcher obtains the information from
ALACSS customers using closed and opened questions. Open ended questions were employed so as
impress respondents in expressing their views and opinion on related matters while closed questions were
used to demand respondents to select an answer from the list provided under each question.
SECONDARY DATA
Secondary data refer to publication that refers to the work of others. Secondary data for the study were
collected from various financial reports also from internet, websites and passed reports.
3.3- ANALYTICAL TOOLS
QUANTITATIVE ANALYSIS
Quantitative analysis use numerical data to identify statistical relationship between variables. Quantitative data are
numerical, ordinal, and nominal. For example; surveys, observation and evaluation that include multiple choice
item and rating (e.g. likers scale) provide quantitative data for analysis.
QUALITATIVE ANALYSIS
Qualitative analysis uses descriptive data to understand processes. (E.g. how student learn in group), develop
insights into the form of sensitizing concepts and present the view of the world from the point of view of the
participants (e.g. the teachers, students and other related classroom). Qualitative data are descriptive. For example;
field notes, interview all provide qualitative data for analysis.
3.4. PRESENTATION OF RESULTS
From the data disclosed on the table 1 below, it can be observed that out of the 35 respondents who
participated to this study, male workers of ALACCS represents 18 workers giving a percentage of 51.4%
and female represents 17 given a percentage of 48.60%. This implies the male staffs are more than
female of ALACCS.
With regards to age, 34.3% (12 workers) are aged between 20 and 30 years old, 16 workers were aged
between 31 and 40 with a percentage of 45.70%. The rest of the respondents were distributed between
those who were aged between 41 and 50 years old and those who are were above 50 years of age, with
percentages of 17.1% and 2.9% respectively. This shows that the work force of ALACCS is made up of
mostly young workers and is more involved in research and creativity. The information provided by them
can therefore be considered as valid and reliable.
As regards, the longevity of service of the employees, a majority of staffs have worked for less than 5
years with a percentage of 85.7 %, (30 workers). Of them, 7 workers have worked between 0 and 2 years
(20%), 37.1% (13 workers) have worked between 2-3 years, 10 employees out of the 35 have worked
between 4-5 years while only 5 workers have worked for more 5 years with a percentage of 14.3%.

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Table 1: Demographic Characteristics
Variable Frequency Percentages
Gender

Male 18 51.4

Female 48.6 48.6

Total 35 100
Age Group
20 – 30 12 34.3
31 – 40 16 45.7
41 – 50 6 17.1
Above 50 1 2.9
Total 35 100
Longevity
0-1 year 7 20.0
2-3 years 13 37.1
4-5 years 10 28.6
Above 5 years 5 14.3
Total 35 100
Source: Finding, 2024

The study’s objective was to assess the lending procedure of ALAACS; with this the following were assessed.

Eligibility for loan

On the lending procedure, the study seeks to find out the eligibility criteria for obtaining loan at ALACCS.

Eligibility Criteria
25

20

15

10

0
Business type Income level Residence

Series1

Figure 1: Eligibility Criteria for loan

Source: findings, 2024. Page 18
The study found that 65.71% (23 respondents) attest that one of the eligibility criteria for granting of loan is
looking at the business type, 25.71% (9 respondents) were of the opinion that income level is one of criteria for
loan eligibility and only 8.58% (3 respondents) opted for residence of the customer being taken as a criterion.

Application means

The study again assessed how the potential borrowers can apply for loan at ALACCS and for the following as seen
in figure 3.

How to apply for loan

30

Branch visit online application

Figure 2: How to apply for loan

Source: findings, 2024.

The results showed that 85.71% (30 respondents) were of the opinion that a potential borrower needs to come
to branch(branch visit) in order to apply for a loan while only 14.29% (5%) attest to there being applying online
for the loan.

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Documents for application

On the documents for the application of loan at ALAACS, the findings is presented in figure 3

Documents required

Collateral

Identity Proof

proof of savings

Business plan

1 3 5 7 9 11 13
Business plan proof of sav- Identity Proof Collateral
ings
Series1 10 13 4 8

Figure 3: Documents required

Source: findings, 2024.

From the figure above it can be depicted that majority of the respondents were of the opinion that the borrower
needs to show proof of frequent and ongoing savings with the institution, followed by 10 respondents who were
of the opinion that the borrower needs to present a business plan if the loan is for a business purpose, 8
respondents opined the presentation of collateral security as a document for loan while just 4 were of the
opinion of presentation of proof of identity by the potential borrower.

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 CHAPTER FOUR
CRITICAL APPROACH
This chapter is divided into section one and two. Section one comprises of problems related to
the topic, managerial problems faced by ALACSS, difficulties encountered by the intern. Section
two is recommendations and suggestions to overcome difficulties faced by intern.

SECTION ONE: PROBLEMS

4.1- PROBLEMS RELATED TO THE TOPIC
Below are some problems which the intern took noticed of during the internship which led me to my
topic?
 High interest rates. Some SME’s enterprises are reluctant to collect loan for their business
because of the high interest rates which comes along with the loan.
 Business failures. This can be caused by climate change for example a loan is taken for
agricultural purposes and then the climate causes the yield to be bad, the loan is bound to be
delinquent as the crops are bad and no way or means to raise back the loan to be repaid.
 Inadequate collateral security. Some business men find it difficult to have loan for their business
because of collateral security to pledge the loan.

4.1- MANAGERIAL PROBLEMS FACED BY ALACSS

·Granting of unproductive loans: ALACCS grants unproductive loans like consumption loans
which cannot generate present or future income to repay the loan. Therefore, unproductive loans that do not
generate future income like loans taken for death ceremonies, consumption and loans taken for leisure. Therefore,
huge amounts of such loans should not be granted to members.
·High Loan Delinquency: Despite the good loan policy managed by ALACCS, it still faces problems
of delinquencies. When this happens, the institution need to spend money in order to recover the money and this is
a problem to the institution. So loans should be evaluated properly before offering them to members.
·Insufficient loan officers: it came to my notice that the personnel in other branches of ALACCS
have multitask due to the lack of loan officers in these branches.
· The absence of ATM boots in its branches especially on Douala branch would have provided 24/7 access to cash
to its members.
·Increasing competition: one the problems faced by ALACCS is increasing competition. Due to the
rising numbers of microfinance’s in Souza and the microfinance’s compete against each other.
· Poor Communication Network: Alaccs is faced with the problem of limited network. This
hinders the local transfer system and delays in Telecast.
4.6.1 PROPOSED SOLUTIONS TO ALACCS
· ALACCS should stop granting unproductive loans in other to reduce the rate of high loan delinquency.
· Create a clear plan for loan repayment and reminders should be sent at every stage.
· Employ more credit officers or loan officers in other branches in other to reduce the task given to other
employees.
· ALLACS has to provide great services to their customers. Otherwise, their customers will switch to
patronize the services of their competitors.
· ALACCS should switch to a better communication network.
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4.1- DIFFICULTIES ENCOUNTERED BY INTERN
During the two (2) months of professional training, the intern faced various challenge such as;

 Communication problems: The intern faced the problem of communication with some
workers and customers who couldn’t understand English well and also due to the fact that some
customers became impolite and aggressive at one point in time.

· Weather and climatic conditions: During this period, we the interns faced a lot of
problem because of heavy down pure and harsh climatic conditions. This made it impossible for the
intern to be at work on time. Such problem can be solved by not punishing interns in such situations.

 Lack of Confidence: Employees were reluctant to offer strategic information needed to

the performance of the union thus preventing the interns from acquiring good information which
could improve their standard of work. As a solution, employees should provide researchers with
sufficient information to facilitate their research and also to inform some information for the
interns to be aware of.

 The software used by the institution: The institution uses software called
“PERFECT” for recording their day to day operations. The intern found it difficult to work on it.

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SECTION TWO: RECOMMENDATIONS
4.4.1- RECOMMENDATION TO ENHANCE TRAINING
 The organization should provide opportunity for training and development of the employees.
 That the course “Report Writing” could be taught twice, that is in two semesters, to enhance a better
understanding of the research process to the students.

4.4.2- RECOMMENDATION TO THE MANAGEMENT OF ALACCS

Having conducted this research and analyzed the field data, the intern recommends the following
points, which if adhered to will positively drive the lending and loan recovery of Alaccs to a reasonable
height.
·ALACCS should device appropriate strategies to ensure adequate lending and loan recovery
management, since not doing so could spell doom for the banks in terms of profitability.
· This study recommends that Alaccs should employ more loan officers. An increase in
the number of loan officers will lead to a sufficient number of works and there won’t be need for a
worker to be replaced by another worker who also has his or her own task to perform.
· This study recommends that Alaccs should adopt and enhance clients‟ appraisal techniques that is, a
professional Loan officer who is well trained so as to improve their performance or better still, the
available professionals should improve more on their skills for better results. Through these techniques,
Alaccs will be able to reduce their nonperforming loans.
· The organization should provide opportunity for training and development of the employees.
 The organization should provide opportunity for training and development of the employees.

4.4.3- SUGGESTION TO OVERCOME DIFFICULTIES FACED BY

INTERN
 The intern suggests that all the employees in the institution should be verse with both
English and French.

 Also, software used by MFI’s should be installed and taught in school so as enable the
students verse with the kind of software they found at the institution.

Page 23
 GENERAL CONCLUSION

In the light of the findings of his study, the following conclusions were drawn. The investigation on the

IMPACT OF LENDING AND LOAN RECOVERY IN MFI (study ALACCS). It was

found that there is a correlation between lending and loan recovery on MFI in that the lending process
does not end on loan disbursement, it ends when the loan has been recovered. This means that loan
recovery is the final step or stage on the lending process in financial institutions. This means if there is
no loan recovery, there is no lending. It was also found out that the causes of default in loan repayment
are: inadequate business plan, inadequate feasibility study, lack of service of internal financial auditor,
inadequate planning and business failure. Finally, the rate of credit advances of MFI is high.

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1.3 Organizational Structure of ALACCS

Source: ALACCS Library

Page 25
ALAMANDUM COMMUNITY CREDITAND SAVINGS PLC

BRANCH OFFICE QUESTIONNAIRE

MICROFINANCE LENDING AND LOAN RECOVERY QUESTIONNAIRE WITH LOAN APPLICATION

NAME OF INSTITUTION.................................................................................................................................................

REGION.........................................................................................

TOWN...............................................................................................................................

ANALYST.............................................................................................................................

Page 26

QUESTIONNAIRE
I am an HND banking and finance student at Divine Yard Institute Souza, researching on the topic “The Impact of
Lending and loan recovery on microfinance Institutions”. You are kindly requested to answer the questions below
in good faith. The study is purely for academic purpose and all information provided will be treated confidential.

SECTION A: Demographic Characteristics

1. Respondent’s gender [ ] Male [ ] Female

2. Age of respondent [ ] 20-30 [ ] 31-40 [ ] 40-50 [ ] above 50

3. For how long have you being working in ALACCS? [ ] 0-1 year [ ] 2-3 years [ ] 4-5 years
[ ] above 5 years

Section B: Lending Procedure in ALACCS

4. What are the basic eligibility criteria for loan at your institution __________________________

5. How can a potential borrower apply for a loan [ ] Branch visit [ ] Online application

6. What documents are typically required for a loan application?

____________________________________________________________________________________________
____________________________________________________________________________________________
__________________________________________________

7. Are there any additional fees associated with loan application: [ ] Yes [ ] No

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