A friend of mine who just quit working with a microfinance institution related to me how he worked every months without getting paid all because there are defaults.

He said the HR told them from the onset that whenever any clients owe the company, you must offset the debt with your salary and if the client pays back, the money belongs to you. But often time, you may probably get 30%or even nothing at the end of the day. He said the company often tell them that they must have zero defaults every month end. The company is not ready to bear any loss.

Is this how all mfi and mfb operate? How does the company expect the loan officers to survive?

If you work in mfi, please let me know how your company achieve low defaults and clear bad debts.