LOAN PERFORMER LOANS MODULE

This page was last updated on

18/08/2008 11:48:15

The loans module handles loans to Individual Clients as well as to Groups. 

Loans can be tracked at either the group level or at the level of the group members. Group members have to be entered into the program with name, member number, gender and membership date and other information. When entering a loan for a group, the total loan amount is broken down into what each member received. Thus LOAN PERFORMER can produce reports on target group (how many loans haven been disbursed per sector, by males/females, how many group members have received a first-time-loan, etc.). If tracking at group member level is activated, you can create a repayment schedule for each group member. 

Regarding loan repayments, LOAN PERFORMER suggests a due amount for the group and if tracking at group member level is activated, also for the group members. You can change the amounts if more or less has been paid. If tracking at member level is activated, LOAN PERFORMER tracks the account balances for the whole group as well as for its members.

LOAN PERFORMER works with "loan products". Each product has characteristics (interest, installment periods etc.). The manager can set default values for each of these characteristics and indicates whether these values are compulsory at the point of entry or not. Thus the program can be configured to be very rigid or very flexible.

Each loan has to be classified according to Loan Fund, Credit Officer in charge and Business Sector. You can also define 3 additional categories to classify loans. E.g. one category can be used to define the use of the loan as "Assets" or "Working Capital", another category can be used to distinguish between "Subsidised" and "Non-Subsidised" loans and a third to classify loans as "Consumer Loans" and "Production Loans". For each category you can enter up to 999 different alternatives. You can create reports on disbursement, outstanding balances, repayment rates and repaid amounts for each alternative.

Configuration Loan Products

Installments can be entered as daily, weekly, bi-weekly, half-monthly, monthly, two-monthly, quarterly, four-monthly, semi-annual or annual installments. A grace period can be entered as well. LOAN PERFORMER proposes a loan repayment schedule, based on the information of the user. But for each installment, date, principal amount and interest can be modified to suit specific repayment needs. This feature can be disabled in the configuration. The manager can enter non-working days and holidays. Due dates that fall on one of these days can be reported automatically to the last working day before the due date or to the next working day (or not changed at all).

For individual loans, guarantors and/or collateral has to be supplied (if defined in the configuration).

Interest can be calculated on a Flat Rate, Declining Balance Amortization or Declining Balance Discounted. Interest calculation can be set according to loan period in number of days or according to installment period. All interest can be paid in equal parts with every installment, all with the first installment or interest is deducted from the disbursed amount. It is even possible to calculate a repayment schedule whereby the client has to pay only interest installments during the grace period.

The branch manager can set a percentage of the loan amount that should be available as a Loan Guarantee amount on the savings account. If this percentage is set to 0%, the loan module can be used independently of the savings module. Otherwise LOAN PERFORMER will check whether the loan guarantee is available on the savings account to guarantee the loan. The percentage can be set by the manager. Withdrawals from the loan guarantee or compulsory savings account are possible up to the balance that guarantees the loan. If the client has more than 1 loan outstanding, the threshold is much higher. As soon as the loan is paid off (or the loan application rejected), the client can withdraw beyond the original balance.

You can set a parameter to indicate whether Commission and/or Stationary has to be paid. LOAN PERFORMER supports 2 types of commission, both as a percentage of the loan amount, and 1 type, which is just a flat amount. The branch manager can set the percentages and the amounts as parameters in the program and he/she can indicate whether the data-entry person may change the defaults. You can indicate whether commissions have to be paid for all loan applications or only for approved loans. Commissions can be paid in cash, by cheque or as a transfer to the MFI's bank account.

Disbursements can be made either in cash, by cheque, to the clients bank account or to the clients savings account. Total interest can be deducted at disbursement. Disbursements can be made in installments. At disbursement you can also deduct charges.

Loan Application

Repayments have to be entered in chronological order. Loan repayments can be made in cash, by cheque, by a withdrawal from the savings account or as a payment directly from the client to the MFI's bank account.

The amount entered as a repayment serves first and for all to repay any outstanding penalties. After that: interest past due, principal past due, interest due and principal due (in this order). Any remaining amount is a pre-payment. 

Loan repayments can be imported from external files (from DBF, XLS or TXT file formats).

Penalties can be added manually to the loan account by the user, or can be calculated automatically by the computer. In the last case, the branch manager can set the penalty as a percentage of a) the principal in arrears, b) the principal and interest in arrears or c) the principal, interest and penalties in arrears. He/she can also indicate how long the computer has to calculate penalties automatically (e.g. up to 6 months after the expiry date of the loan).

The branch manager can also ask LOAN PERFORMER to automatically print Notification Letters for clients in arrears. The contents of each letter can be defined by the user as well as the frequency of sending the letter (e.g. only for loans of between 30 and 60 days in arrears). Also labels can be generated for these letters.

Loan Provisions can be calculated on the fly. The user can define 5 categories of bad loans according to the number of days in arrears. For each category and for each type of client a percentage can be set to be calculated on the principal in arrears and to be added to the loan provision. If so indicated, the loan provision general ledger accounts (one for individual clients, one for groups) will be updated automatically to reflect the correct balance.

Loans can be Rescheduled or Written Off. Rescheduling has been made very flexible. You can add additional installments or remain with the same installments and re-arrange the principal and interest amounts. This means you can e.g. shift installments to a future date without charging additional interest (suppose the client fell sick for 3 months and you want to shift all dues 3 months ahead).

Loan Repayment Group

Loans can be Archived and later on De-archived. So if your database becomes slow because of old loans you can just archive all loans up to a certain date and save them in a separate database.

Some Reports produced by the Loan Tracking Module:

Planning data from an external Excel spreadsheet can be incorporated into LOAN PERFORMER. This spreadsheet has to produce the indicators below for every loan fund and for every financial year. When incorporated into LOAN PERFORMER, monitoring reports can be printed monthly. These reports compare targets to actual achievements with regard tot the following Indicators are used (more can be added on request):

These indicators are calculated for individual clients, for groups and cumulative wherever appropriate. Each indicator can be activated or de-activated. In the last case no reporting will be done on this one.

Loan Provision


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