CMCP CH 13 Exam Questions With Correct
Answers
Remedial Management - answerThe process of instituting effective and practical approach in
the collection and recovery of hardcore delinquent accounts. Management of problem accounts
where early detection plays a major role.
-Implement preventive ...
Remedial Management - answer✔The process of instituting effective and practical approach in
the collection and recovery of hardcore delinquent accounts. Management of problem accounts
where early detection plays a major role.
-Implement preventive measures to minimize delinquency.
- Incorporate monitoring processed to detect when accounts begin to deteriorate and to classify
problem accounts before they become hardcore delinquent.
- Maximize collection efforts through assigning a specialized unit to manage the recovery
process. - answer✔Goals of Remedial Management
Problem Account - answer✔- defined as one "in which there is a major breakdown in the
repayment agreement resulting in an undue delay in collection, or in which it appears legal action
may be required to effect collection, or in which it appears legal action may be required to effect
collection, or in which there appears to be a potential loss. Because a problem account may
eventually turn into a bad debt if not properly handled, it must be given special attention -and
thus the necessity of discussing this subject thoroughly."
Causes of Loan Delinquency:
Failure to adhere to set out lending policies - answer✔This whereby a lending officer grants a
loan to a borrower without the full considerations agreed in the lending policy of the institution
may be because of experience and relationship. The economic conditions are dynamic as such
granting a loan basing on experience may result in loan delinquency.
Insider lending - answer✔This occurs when loan is given out to employees such managers,
directors among others without following proper lending procedures.
Improper appraisal techniques by lending officers - answer✔This is when a lending officer
conducts appraisals of the viability of the loan's purpose, may come up with inappropriate
judgement pertaining to issues like productivity of the business and the progress being made.
This may result in the lending officer failing to note variations between the proposal and what is
on the ground. Hence this would result in post payments of loans borrowed.
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