Waive interest or a portion of principal during loan repayment

Description

Need facility to waive the interest or a portion of the principal of a loan

Such a facility should have a separate security permission associated with it.

Environment

None

Activity

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Ed Cable
January 9, 2012, 5:48 PM

Based on 1/9/2012 triage meeting, we need additional details and business requirements for this issue to estimate level of effort before we can assign to a release.

Reporter (Kakhaber) - please provide additional details.

Binny Gopinath Sreevas
January 15, 2012, 6:10 PM

Need a facility to support an MFI that may decide to waive a portion of the outstanding principal due to any reason. The reason could be customers inability to re-pay fully or adjustment of amounts due to fluctuations in foreign exchange (MFI works in a country where loans are given in multiple currencies, but is recorded in Mifos in a single currency) etc. Frequently, the MFI also wants to waive the over-due interest without closing the account (i.e. the member will continue to re-pay the loan).

For example,

  • a loan was given for 30,000 for six months, monthly repayments with 5 months principal-only grace period.

  • At the end of the 3rd month, the loan has 30,000 principal oustanding and 3,000 interest over-due.

  • The MFI decides to waive the interest and waive 5,000 of the principal too.

  • The member is expected to pay interest on 25,000 for 4th and 5th months and then repay the 25,000 on the 6th month.

The workaround in Mifos is to close the loan (closed-written off). And then open a new loan for 25,000. This will make the accounting entries to go all wrong (write-offs will add up to 33,000) and also cash balance will not be right as per accounting (25,000 will be treated as a cash disbursement).

Kakhaber Kheladze
July 17, 2014, 6:48 PM

Dear Binny ,
Is it active in Mifos X?
(Truing to close old and outdated issues)

K

Assignee

Binny Gopinath Sreevas

Reporter

Kakhaber Kheladze

Labels

Implementation Priority

Should

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Fix versions

Priority

Minor
Configure