Loan Monitoring: Overdue Buckets, Field Collections and the Weekly Review
Monitoring a loan book comes down to three habits. Sort overdue accounts into ageing buckets daily, tie every field receipt to a borrower, a collector and a date, and review demand against collection each week. GullySystem’s Loan Management System does the sorting and keeps the borrower list behind every figure.
Sort Overdue Accounts Into Buckets, and Do It Daily
Most small lenders learn their overdue position at month end, after an afternoon of filtering spreadsheets. By then the follow-up visit is already a fortnight late.
Accounts should sort themselves every day into current, 1 to 30 days, 31 to 60, 61 to 90, and over 90. The bucket decides who calls, who visits and who escalates.
The bucket total is useless on its own. What you need behind each figure is the borrower list, so a number becomes a route the same morning.
The First Missed Instalment Is the One That Matters
A borrower in the 1 to 30 bucket is usually recoverable with a phone call. The same borrower at 90 days has often reorganised their life around not paying you.
Treat the first miss as an event, not as noise. Find out whether it was a cash-flow gap, a family emergency, or a collector who did not turn up on the usual day.
Write down every promise to pay against the loan, with the date promised. A promise kept twice tells you something, and a promise broken twice tells you more.
Tie Every Rupee From the Field to a Name and a Date
A collector returning in the evening with a bag of cash and a notebook is the weakest point in most small lending businesses. If the total is short, there is nothing linking an amount to a borrower.
Each receipt should be entered against the borrower when it is taken, on the collector’s phone, carrying the collector’s name and the date. The office then sees the collection the same day rather than the next week.
The accountant’s job at closing becomes matching the day’s cash against the receipts already recorded. A gap shows up that evening, not at the quarterly audit.
Run One Weekly Review on Demand Against Collection
Fix a day and keep it. The review is short if the records are clean and long if they are not, which is itself a useful signal.
Look at what was due against what came in, split by collector and by branch. A collector whose demand is always met and a collector whose demand is always missed both need a conversation, for opposite reasons.
These are the figures worth having in front of you.
- Demand versus collection for the week, by collector and by branch
- Overdue ageing by bucket, with the borrower list behind each total
- Accounts that moved from current into the 1 to 30 bucket this week
- Applications waiting on sanction, and the document each one is missing
- Loans closing this month, with collateral due for release
Before You Restructure, and When a Spreadsheet Is Still Fine
A renewal or a top-up given to hide an overdue account is how a small book goes bad quietly. Read the full repayment history first, and keep the old schedule on record next to the new one.
If you disburse a handful of loans a month and know every borrower by name, a well-kept spreadsheet is still enough. This is not a core banking system either, and it does not make lending decisions for you.
Once there are field collectors, SHG groups or more than one branch, GullySystem’s Loan Management System keeps each loan on one record. It runs from enquiry and KYC through sanction, disbursement, the EMI schedule and every receipt, with a name and a date on every change.
Weekly loan book review sheet
One page with demand against collection by collector, the five ageing buckets with counts and amounts, accounts that slipped a bucket this week, and promises to pay falling due. Fill it for last week from your current records and see how much of it you can actually answer.
Frequently asked questions
What are overdue buckets and why do they matter?
They group accounts by how many days a payment is late: current, 1 to 30, 31 to 60, 61 to 90 and over 90. They matter because the right action changes with the age. A day-old miss needs a call, and a 90-day miss needs a visit and a decision.
How do I stop cash collected in the field going missing?
Record each receipt against the borrower at the moment it is taken, with the collector’s name and the date, so the office sees it the same day. Then match the evening cash against the recorded receipts. Any gap surfaces that night rather than at audit.
Is a loan monitoring system the same as core banking software?
No. A loan monitoring system tracks your own book: applications, sanctions, disbursements, schedules, receipts and overdue ageing. A core banking system with bureau and regulator feeds is a different class of product, and a bank or a large NBFC will need that instead.
Have a specific situation to work through?
This article covers the general case. Tell us what you’re actually dealing with and we’ll respond directly.