Collections Management Overview

Collections & Delinquency Management helps you follow up on overdue loans until they are paid. When a loan's Days Past Due (DPD) moves it into a delinquency bucket, the system opens a Collection Case and assigns it to a collection agent. It also sends reminder emails to the borrower, lets the agent record promises to pay and follow-ups, and resolves the case when the loan's DPD comes back to 0. If the borrower cannot pay, you can start a restructure from the case.

To access it, go to:

Home > Lending > Collections

The Collections section has four links:

Collection Case: one case for each overdue loan.
Collection Case Log: history of bucket changes, reminders and hardship requests.
Dunning Rule: when and how often reminders are sent.
Process Collection Dunning: the daily job that sends the reminders.

Prerequisites

Loan Classification Ranges in the Company (Company > Loan tab). Each range has a Classification Code, Min DPD and Max DPD, for example Standard 0–0, Sub-Standard 1 1–30, Sub-Standard 2 31–60 and Loss 61+. Collections uses these ranges as buckets. Ranges with Is Written Off checked are used for written-off loans. See NPA Classification.
Process Loan Classification running daily, so the Days Past Due Log of each loan stays updated. Collections works from this log and does not calculate DPD itself. See Process Loan Classification.
At least one enabled user with the Loan Officer role. Cases are assigned to these users.
An email ID for the borrower: Email ID in Customer, or Personal Email / Company Email in Employee. Reminders are sent only to this email.
An outgoing Email Account, so that reminder emails can be sent.

How it works

Process Loan Classification updates the loan's DPD in the Days Past Due Log.
When the loan moves into a delinquency bucket, a Collection Case is opened and assigned to a Loan Officer.
Process Collection Dunning runs every day and sends reminders based on the matching Dunning Rule.
The agent calls or visits the borrower and adds Activities and any Promise to Pay in the case.
If the borrower does not pay by the promised date, the case status changes to Broken PTP.
If the borrower needs relief, the agent can start a Hardship / Restructure from the case.
When the borrower pays and DPD comes back to 0, the case is resolved.