Portfolio: Loan Transaction Type | Cash Accounting | Accrual Accounting Type 1 (upfront interest recognition for loans not involving interest recalculation) |
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Submit loan application | N/A | N/A |
Approve loan application | N/A | N/A |
Loan Disbursement - Fixed amount disbursed from MFI to Applicant
- Single transaction created to represent disbursement
- If charges due at disbursement, another transaction is auto created to represent their payment
- If charges that are not due at disbursement are present, another transaction is auto created to represent the "application" of this charge
| - Only principal is accounted
- No interest or fees due at disbursement are accounted
| - Principal is accounted
- Expected interest is accounted
- Paid fees are accounted for directly (no control accounts used, cash gets debited directly)
- Applied (expected) fees are accounted
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Undo Disbursement - Any transaction that exists is reversed
| - Journal All journal entries entered for disbursement this loan are reversed
| - Journal All journal entries entered for disbursement this loan are reversed
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Loan Repayment - Fixed amount repaid to MFI from Applicant on given date
- Amount broken down into principal/interest/fees/penalties
- Single transaction created
- Back-dated transaction allowed, these can affect the derived fields of other transactions.
| - principal/interest/fees/penalties accounted for as configured
- Accounting handles side affect on other transactions (for backdated entries)
| - principal/interest/fees/penalties accounted for as configured
- Accounting handles side affect on other transactions (for backdated entries)
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Adjust Loan Repayment - Reverses original transaction
- Creates new transaction to represent new details
- Adjusting repayment can affect the derived fields of other transactions
| - entries for original transaction reversed
- entries for new transaction created
- Accounting handles side affect on other transactions
| - entries for original transaction reversed
- entries for new transaction created
- Accounting handles side affect on other transactions
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Waive Interest - Transaction created to represent amount of interest being 'waived'
- Waiving interest in the past can affect derived fields of other transactions
| - No impact on cash based accounting if waiver is done in the future
- If waiver is done in the past, changes to derived fields of already paid installments are accounted for
| - entries for interest waived
- If waiver is done in the past, changes to derived fields of already paid installments are accounted for
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Write off - Transaction created to represent outstanding balance of loan being written off
| - principal/interest/fees/penalties accounted for as configured
| - principal/interest/fees/penalties accounted for as configured
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Add Loan Charge - Adding charge in past would affect derived fields of other transactions
| No impact on cash based accounting? | Not Handled |
Remove Loan Charge - Validations have been added to not allow removing loan charges once a loan is approved
| N/A. No impact on accounting | N/A. No impact on accounting |
Waive Loan Charge Could directly affect other transactions if - Functionality has been changed to only allow waiving of charges after a loan has been disbursed
- Waiver works only if the charges is not already paid
- If the charge is paid or partially paid
- , waiver waives only the unpaid amount
| N/A. No impact on cash based accounting ? Not Handled |
- entries for charges waived
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