Understanding Over-Indebtedness

• by Jesila Ledesma
• Sep 26, 2013
• 1 min

This video talks about over-indebtedness. The subject is ranked by microfinance industry stakeholders as the top risk facing the industry in 2012. Simply put, over-indebtedness is a situation where one takes on too much debt beyond one’s capacity to pay. When faced with such situation, the poor takes on further sacrifices in basic quality of […]

This video talks about over-indebtedness. The subject is ranked by microfinance industry stakeholders as the top risk facing the industry in 2012. Simply put, over-indebtedness is a situation where one takes on too much debt beyond one’s capacity to pay. When faced with such situation, the poor takes on further sacrifices in basic quality of life including asset erosion. As if this is not harmful enough, the poor also has to contend with threats and harassment for inability to pay on time from some staff and other clients of financial institutions. Though complex, over-indebtedness need not be considered a debt trap by low-income clients. It can be addressed by an industry with firmer resolve to understand the condition and needs of clients and committed to improving products and services tailor –made to clients’ evolving requirements.