Penalty Charged On Overdue Matured Loan

Description

Project Overview

Overview

This feature will allow MFIs to charge overdue loans only after the loan has matured based on the current outstanding balance.

Background and Business Need

Mifos currently only supports overdue installment charges. So daily repayments are penalised everyday if they are partly paid, and weekly repayments are penalised every week if they are partly paid and so on.
Overdue penalties are currently chargeable on every overdue installment BUT it should also support penalties charged only on OVERDUE LOANS (i.e loans that have past maturity), separately without penalising every overdue installment.
In the event that you have a fee frequency on your penalty then it should compound the charge on % BALANCE OUTSTANDING. Meaning on a fee frequency of 3 months for example - the 1st months charges the balance. The 2nd months charges the balance plus 1st penalty fees. Then the 3rd month charges the initial balance plus penalty for 1st month and penalty for 2nd month. (Charge Calculation = %Loan Amount + Interest + Penalties which is the same as %Outstanding Balance
Since these charges apply after the loan has matured it would be ideal to have a feature where we can tell it to stop charging penalties. Currently the penalties are applied inifinitely.

90% of MFIs in Africa and in Sri Lanka are using this penalty charge formula on paper but cannot implement it automatically on Mifos. The reason why it is so popular is because most MFIs provide daily and weekly loans to vendors and micro SMEs. So they cannot afford to charge their clients everytime they miss or partly pay an installment everyday in a loan period. As we strive to maintain our position as a financial inclusion technological platform.

Project Supporters(s)

Zimbabwe - 6 Microfinance organisations
Sri Lanka - 1 MFI
Kenya - 1 MFI
Tanzania - 1 Mifos Consultancy firm
TAAT Consutancy - Ed Tshuma
Skyburg Systems - Myself

Project Details

Assigned contributors

Ed Tshuma

Venon Mapfunde

Project Status

We would like to have the project complete within 14 days

Work required involve adding charge time type to the penalty fees

Calculating charges on Total Outstanding Balance and not on missed installment.

Attached is a design of how we imagine the module will like after development.

Additional Information

Mailing list discussions - https://groups.google.com/d/msg/mifosdeveloper/fK-XfVVZXzs/PjGyXb7XAAAJ
We understand that Musoni have already got this feature developed.

Environment

None

Activity

Show:
Emmanuel Njoku
June 6, 2018, 1:37 PM

I enabled two factor authentication and I got the error trying to login to
Mifos.

Regards

S Mtetwa
June 6, 2018, 1:41 PM

Erm how is this connected to penalty on overdue loans exactly? Or this is an independent issue altogether? If so I would recommend you open a new thread for this topic so that you can get better assistance. I have never dealt with two factor authentication personally.

Kind regards,
Sifiso

S Mtetwa
June 7, 2018, 6:42 AM

Hi Freddie,

Waiting to find out where to access the repo for testing as well. The person who implemented the changes was anonymous. So hoping that maybe Sampath or Santosh can assist with retrieving the app for us.

Regards,

From: Freddie Koskey <kyfredy@gmail.com>
Sent: Thursday, June 7, 2018 7:20 AM
To: sifiso@skyburgsystems.org
Subject: Re: [JIRA] () Penalty Charged On Overdue Matured Loan

Hi Sifiso,

Did you get the repo for testing? . also interested

regards

On Wed, Jun 6, 2018 at 11:07 AM, S Mtetwa (JIRA) <jira@mifosforge.jira.com <jira@mifosforge.jira.com> > wrote:

https://mifosforge.jira.com/browse/MIFOSX-2848?page=com.atlassian.jira.plugin.system.issuetabpanels:comment-tabpanel <https://mifosforge.jira.com/browse/MIFOSX-2848?page=com.atlassian.jira.plugin.system.issuetabpanels:comment-tabpanel&focusedCommentId=100504#comment-100504> &focusedCommentId=100504#comment-100504

S Mtetwa commented on MIFOSX-2848:
----------------------------------

Hi,

Glad to see there was a resolution pending testing. Where can I access the app with changes for testing.

Regards,

Sifiso

From: Anonymous (JIRA) <jira@mifosforge.jira.com <jira@mifosforge.jira.com> >
Sent: Tuesday, June 5, 2018 9:59 PM
To: sifiso@skyburgsystems.org <sifiso@skyburgsystems.org>
Subject: [JIRA] () Penalty Charged On Overdue Matured Loan

https://mifosforge.jira.com/browse/MIFOSX-2848?page=com.atlassian.jira.plugin.system.issuetabpanels:all-tabpanel

Anonymous updated MIFOSX-2848:

Status: @Fineract (was: Open)

Penalty Charged On Overdue Matured Loan

Key:
URL: https://mifosforge.jira.com/browse/MIFOSX-2848
Project: Mifos X
Issue Type: New Feature
Components: Fees, Charges &amp; Penalties
Reporter: S Mtetwa
Assignee: Ed
Priority: Major
Labels: MailingGroup, Volunteer, community, musoni, volunteer
Attachments: Screenshot 2018-04-24 13.46.25.png
Original Estimate: 2 weeks, 4 days
Remaining Estimate: 2 weeks, 4 days

Project Overview Overview

This feature will allow MFIs to charge overdue loans only after the loan has matured based on the current outstanding balance.

Background and Business Need

Mifos currently only supports overdue installment charges. So daily repayments are penalised everyday if they are partly paid, and weekly repayments are penalised every week if they are partly paid and so on.
Overdue penalties are currently chargeable on every overdue installment BUT it should also support penalties charged only on OVERDUE LOANS (i.e loans that have past maturity), separately without penalising every overdue installment.
In the event that you have a fee frequency on your penalty then it should compound the charge on % BALANCE OUTSTANDING. Meaning on a fee frequency of 3 months for example - the 1st months charges the balance. The 2nd months charges the balance plus 1st penalty fees. Then the 3rd month charges the initial balance plus penalty for 1st month and penalty for 2nd month. (Charge Calculation = %Loan Amount + Interest + Penalties which is the same as %Outstanding Balance
Since these charges apply after the loan has matured it would be ideal to have a feature where we can tell it to stop charging penalties. Currently the penalties are applied inifinitely.
90% of MFIs in Africa and in Sri Lanka are using this penalty charge formula on paper but cannot implement it automatically on Mifos. The reason why it is so popular is because most MFIs provide daily and weekly loans to vendors and micro SMEs. So they cannot afford to charge their clients everytime they miss or partly pay an installment everyday in a loan period. As we strive to maintain our position as a financial inclusion technological platform.

Project Supporters(s) Zimbabwe – 6 Microfinance organisations Sri Lanka – 1 MFI Kenya – 1 MFI Tanzania – 1 Mifos Consultancy firm TAAT Consutancy – Ed Tshuma Skyburg Systems – Myself Project Details Assigned contributors Ed Tshuma Venon Mapfunde Project Status We would like to have the project complete within 14 days Work required involve adding charge time type to the penalty fees Calculating charges on Total Outstanding Balance and not on missed installment. Attached is a design of how we imagine the module will like after development. Additional Information Mailing list discussions – https://groups.google.com/d/msg/mifosdeveloper/fK-XfVVZXzs/PjGyXb7XAAAJ We understand that Musoni have already got this feature developed.

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S Mtetwa
June 20, 2018, 10:55 AM

I noticed anonymous has made another change to this ticket. And the status is again resolved and ready for testing. Where is the repo or build that is ready to test?

Santosh Math
June 22, 2018, 8:50 AM

Assignee

Edmore Tshuma

Reporter

S Mtetwa

Implementation Priority

Must

Team

Core

productboard URL

None

Man Day Estimate

None

Time tracking

0m

Time remaining

112h

Components

Sprint

Core Team S1

Due date

2018/06/14

Priority

Major
Configure