Disbursement is done at branch offices via Bearer /Endorsed cheques. The following table describes the work allocation between MFE and BH in the loan disbursement process.
Disbursement Vouchers are prepared for each disbursement. The Branch Accountant updates the Cash Book or Bank Book for each disbursement. (The case is different where a branch with more than 75 lakhs of outstanding has an accountant owing to large transaction in the branch. That is happening in Chhaygaon Branch.) Any disbursements for Fixed Assets must be recorded in the Fixed Asset Register.
Branch Staff Involved & Main tasks to be performed
MFE
1.Communicate to the client about the loan sanction and loan amount
2.Collect required documents Photo ID (ration card or voter ID card)
3.Trade licence
4.Completion of loan documents (DPN ,Loan Agreement )
5.Prepare Loan Passbook
6.Thorough check of documentation done
7.Upfront charges to collected :loan processing fee, membership fee, and risky fund/insurance fee during disbursement
8.Issue receipt against each cash collection
BH
1.Arrange Fund for disbursement
2.Checks the loan documents
3.Collect upfront fee, membership fee and security fund/ insurance fee from MFE and reconcile against loan to be disbursed
4.Double check documentation
5.Briefly explain to the clients about the loan terms and conditions, credit discipline and eligibility criteria for subsequent loan.
6.Remind members on group responsibility & mutual accountability
7.Ensure documents are signed by the client
8.Disburse loan to the clients to the clients
9.Deposit collected fee and charges in the bank
10.Account for the day’s transactions.
11.File and store the documents at an appropriate location
Loan Repayment
Recovery of loan instalment will be made by the MFE at field level on a weekly basis. Repayment is to be collected by the concerned MFE in cash on issue of a cash receipt duly signed by him/her and the borrower who paid the cash. The money receipt is in two copies, one is to be submitted in the office and original for the client against payment. The MFE also updates the passbook of the client. The repayment collected is deposited in the bank (or branch office if Bank is closed) by concerned MFE. The deposit details should be given to the Branch Head with receipt copies. If in any case client comes to the branch office for depositing the repayment, Branch Head should accept it and issue money receipt against it.
Procedure for Disbursement
Activities
• The loans are disbursed only after they have been sanctioned by the HO.
• As the disbursement takes place via cheque the BH/MFE first goes to the HO before the disbursement to collect the cheques for the sanctioned loan.
• The pre informed members come to the branch office along with the required documents (Id/address proof) and fees (LPF & Insurance premium).
• The MFE collects the fees and documents from the members and executes the loan documents. (Like DPN, Inter se agreement) and issues a receipt for the fees collected.
• MFE handovers all the executed loan documents along with the JLG file containing the loan application form to the BH.
• The BH checks the documents for completion and if the any of them are not complete asks the MFE/client to complete them.
Procedure for Loan Repayment Collection Process
• MFE will go to attend Centre Meeting for repayment collection. He/She shall carry Disbursement and Collection Sheet (DCS).
• All JLG members in a Centre should deposit their weekly instalments to the respective GR before the arrival of MFE
• GR should hand over the total collected amount to the MFE with pass books.
• MFE should count the cash and tally it with total due from DCS.
• If amount collected is tallying with total due, MFE is to update the DCS (member wise) and get it signed by the GR. He/She also has to update the individual Pass Books and give it back to the GL.
• If amount is not tallying with total due mentioned on DCS then ask GR to make up the difference.
• If difference amount gets collected then MFE proceeds further, otherwise follow the delinquency management process.
• MFE is to return to the branch with DCS and cash. He/She should counts the total cash collected for the day and tally total due for the day.
• BH should check the DCS file for the next week meetings and insure that all the staff are completing it on regular basis.
• MFE should double check their DCS before proceeding for repayment collection.
