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Best practices for bad loans

• Companies that offer credit—banks, retail groups, utilities, and many others—can reduce their write-offs significantly by applying the same marketing expertise they use in selling credit in order to collect from debtors. A first step is for corporate leaders to insist that the collections department must meet the same performance standards they demand throughout the organization.
• Particularly in emerging markets, these banks and other credit-providing companies can engineer vast improvements in their collections by segmenting delinquent borrowers and tailoring their approach to specific segments. A centralized collections department is a prerequisite for implementing effective and efficient collections operations.