SHG Disbursement Review: Target and Shortfall Claims
During a financial-literacy drive, a branch tracks SHG loan disbursements (in ₹ lakh) for four quarters: Q1 240, Q2 300, Q3 360 and Q4 420. The branch's internal rule is that each quarter's disbursement should be at least 25% higher than the previous quarter; Q1 is exempt because it is the base quarter. The annual target is ₹1,350 lakh. In the review note, the branch head writes: 'We achieved about 98% of the annual target, and both Q3 and Q4 fell short by the same percentage, so the shortfall is uniform.' A clerk has to verify the note. The branch also reports that ₹1,254 lakh was collected against the ₹1,320 lakh disbursed during the year. You are asked to check the percentage claims, compute the average quarterly disbursement, and comment on collection efficiency.
1. Test the branch head's two claims: about 98% annual achievement and equal percentage shortfall in Q3 and Q4.
Read the worked answer
Annual achievement = 1,320 / 1,350 × 100 = 97.78%, so 'about 98%' is fair.
Growth rule check:
- Q2 target = 240 × 1.25 = 300; actual 300, no shortfall.
- Q3 target = 300 × 1.25 = 375; actual 360; shortfall = 15; shortfall as % of target = 15/375 = 4%.
- Q4 target = 360 × 1.25 = 450; actual 420; shortfall = 30; 30/450 = 6.67%.
The shortfalls are not equal in percentage. The note is half right: annual achievement is about 98%, but the 'uniform shortfall' claim is wrong.
2. Compute average quarterly disbursement and collection efficiency. State what the collection figure does not prove.
Read the worked answer
Average quarterly disbursement = 1,320 / 4 = ₹330 lakh.
Collection efficiency = 1,254 / 1,320 × 100 = 95%. This means 95% of the amount disbursed during the year was collected. It does not prove that all collections were from current dues, that overdue principal was cleared, or that asset quality improved; a branch could collect old dues while new loans turn sticky. It also ignores the timing of disbursements and collections.
3. The Q4 target is ambiguous. Compute it on both bases and say which fits the wording '25% higher than the previous quarter'.
Read the worked answer
Base 1 - previous quarter actual: 360 × 1.25 = 450; shortfall = 450 − 420 = 30; 30/450 = 6.67%.
Base 2 - previous quarter target: 375 × 1.25 = 468.75; shortfall = 48.75; 48.75/468.75 = 10.4%.
The wording 'higher than the previous quarter' normally means higher than what actually happened in the previous quarter, so 450 is the defensible target. The branch should state the base explicitly; otherwise the same actual figure can be presented as a 6.67% or a 10.4% miss.