ABAASA GODIUS College of Economics and Management Kampala International University

Loan recovery protects the lending capacity of microfinance institutions, but the way overdue accounts are managed may also influence customer relationships. This article examines monitoring and follow-up, debt collection, restructuring and rescheduling, and collateral and guarantee enforcement in relation to customer retention. It develops a literature-based analysis and a proposed empirical study of ASA Microfinance (Uganda) Limited and UGAFODE Microfinance Limited in Mbarara District, Western Uganda. Fifteen selected scholarly and university-repository sources inform a narrative synthesis, combining Ugandan credit-management research with international evidence on repayment design, customer relationships and research measurement. The analytical findings distinguish repayment from retention, identify trust and perceived fairness as plausible mechanisms, and show that flexibility involves context-dependent benefits and risks. They also demonstrate why intention to remain, recommendation and verified service use should not be treated as identical outcomes. The article presents a conceptual framework, an illustrative recovery pathway, a measurement matrix and a proposed management scorecard. A cross-sectional customer survey supported by staff interviews and, where permitted, administrative records is proposed. No primary data were supplied or collected, so the article reports no institution-specific statistical findings. It concludes that recovery practices should be assessed jointly against portfolio outcomes and customer experience, with future recommendations tested against evidence from the selected institutions.