Version 1.0
Prepared by: @Lorraine Sebata
Approved by: @Lashanda Mackey
Reviewed date: 2025-09-04
Next review date: 2026-09-04
This policy applies to all loan products offered by Easyterms and covers all stages of debt recovery, from early arrears management to legal action and write-offs.
This Debt and Recovery Policy outlines Easyterms' framework for managing delinquent loans and recovering outstanding debts. Its purpose is to minimize credit losses, maintain portfolio quality, ensure fair and consistent treatment of clients, and comply with all relevant legal and regulatory requirements regarding debt collection.
This policy applies to all loan products offered by Easyterms and covers all stages of debt recovery, from early arrears management to legal action and write-offs. It applies to all employees, agents, and third parties involved in the debt collection process.
The company shall implement proactive measures to identify and address potential repayment difficulties at an early stage, including regular communication with clients and offering viable repayment solutions where appropriate.
All debt collection activities shall be conducted with professionalism, respect, and adherence to ethical standards. Harassment, intimidation, or deceptive practices are strictly prohibited. Clients' rights and privacy shall be protected at all times.
All debt recovery procedures shall comply with applicable national laws and regulations governing debt collection, consumer protection, and financial services, including but not limited to [mention specific local laws, e.g., Consumer Credit Act, Debt Collection Practices Act].
Clear, transparent, and timely communication shall be maintained with clients regarding their repayment status, outstanding amounts, and the consequences of non-payment. All communications shall be documented.
The company may consider loan restructuring or rescheduling options for clients facing genuine financial hardship, provided that the client demonstrates a willingness to repay and a viable plan for doing so. Such decisions will be made on a case-by-case basis and documented.
Where loans are secured by collateral, the policy shall outline the process for managing, valuing, and, if necessary, realizing the collateral in accordance with legal requirements and the loan agreement terms.
Legal action for debt recovery shall be considered as a last resort, after all other amicable collection efforts have been exhausted. The decision to initiate legal proceedings must be approved by senior management and conducted in compliance with legal due process.
Loans deemed uncollectible after exhaustive recovery efforts may be written off in accordance with the company's accounting policies and regulatory guidelines. Write-off does not extinguish the debt but removes it from the active loan portfolio.
All employees involved in debt collection shall receive regular training on this policy, relevant laws, ethical collection practices, communication techniques, and negotiation skills.
Robust internal controls shall be in place to monitor the debt recovery process, track collection performance, and identify areas for improvement. Regular reports on arrears and recovery efforts shall be submitted to senior management.
Board of Directors / Senior Management: Overall responsibility for approving and overseeing the Debt and Recovery Policy and strategy.
Credit/Risk Department: Responsible for setting credit policies that minimize default risk and providing insights into portfolio quality.
Collections Department: Responsible for day-to-day debt collection activities, client communication, arrears management, and implementing recovery strategies.
Legal Department (or external counsel): Provides legal advice, manages legal recovery processes, and ensures compliance with debt collection laws.
Collections/Finance Department: Responsible for loan write-off procedures, accounting for bad debts, and financial reporting related to the loan portfolio.
This policy will be reviewed at least annually, or more frequently if there are significant changes in laws, regulations, economic conditions, or the company's loan portfolio performance.