What happens when a repayment is late?
A payment is considered late if it has been received by the MYC4 Staff later than the 7th day after the scheduled repayment day. If the repayment is late, or if the repaid amount does not match the repayment plan, the repayment schedule turns red. The Provider, who is responsible for the Loan in question, will then visit the Business and find out why the repayment is late. The Provider will post a blog on the Business’ blog to explain the late repayment. According to best practice in microfinance a Loan defaults after it has missed repaying an accumulated amount corresponding to six months or ordinary, planned installments. If you only looked at when the last repayment was done, a borrower could potentially just make a small repayment every three months and avoid default (while the debt increases due to the interest burden of additional credit).
