Analysis of the factors involved in the growth of non-performing loans of financial services companies
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Abstract
This research was carried out in companies dedicated to the outsourced service of credit granting and collection management, these credit companies provide financial services to companies in various sectors, the main objective was to identify the main causes of the increase in the overdue portfolio of these organizations. The literature review allowed conceptualizing some important aspects related to collection management and portfolio control policies such as credit policies, risk assessment, economic conditions, quality of the collection process, client characteristics, and internal and external factors that may influence default. With a qualitative approach and using a methodology such as an in-depth interview to the financial managers of credit administration companies to deepen the results obtained. As the main finding, it was observed that the lack of updating their credit policies on the evaluation of the credit record of customers is the factor responsible for the overdue portfolio of these companies. Based on this, it was concluded that an effective collection management requires firm policies which must be strictly complied with for an adequate portfolio control, these policies must be established considering aspects such as a detailed evaluation for granting credit, clear payment conditions, proactive follow-up, clear collection policies where the penalties for each case are established, in addition, supported by the use of technology, other financing alternatives must be considered.
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