Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Cases An Active Learning Approach

Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt

2nd Edition

9781266566899

Students also viewed these Economics questions