Question
In a micro finance bank (which loans money to groups of poor borrowers), there are two basic tasks: origination of loans (sales) and collection. Both
In a micro finance bank (which loans money to groups of poor borrowers), there are two basic tasks: origination of loans (sales) and collection. Both are connected in that the originator screens for risk, which affects collection, and the collector's behavior could affect whether a borrower returns as client in the future. Suppose these tasks are executed by different people.
Discuss the each pros and cons of rewarding them
(i) on measures of their respective tasks (loans originated and collected),
(ii) the profitability of loans = origination times successful collection.
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