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- This functionality is mainly needed for exchange operations. transactions that involve more than one currency. The transaction may be initiated in one currency, on an account which is opened in another currency. Evseery Every account will be opened with a currency (which will be the base-currency for that account).
For any cross-currency operations (between different currencies) Mifos will first make an exchange operation automatically. Example, if a deposit (or withdrawal) is made in USD on a CDF account, Mifos will convert the USD amount to CDF as per the currency exchange rate applicable for the transaction date.
Then the corresponding CDF amount will be posted to the deposit or loan account.
Mifos will need have a provision to maintain daily or periodic exchange rates between various currencies. In Mifos, if no exchange rate is found for the current date, system will user the latest rate available that is available on or before the transaction date.
- Loans disbursements will always be done in the account currency (no change to what Mifos supports today), however, repayments can be done in different currency but in that case exchange operation is needed.
- For financial accounting process, a special Exchange Position account and Equivalent Exchange Position account will be maintained and corresponding amounts in source and target currency maintained in posted to these accounts.
In the initial scope – Only deposits, withdrawals and repayments will be allowed in multiple currencies. Fees cannot be applied in multiple currencies. Also, loan disbursals will not be supported in any currencies other than the account currency.
Background and strategic fit
There are Mifos users in countries where the members may prefer to do transactions in currencies other than the base currency or the currency in which the account is opened.
Today, the currency conversions will need to be done outside Mifos and any record of the source currency will not be available in Mifos.
It also helps to Mifos more suited for micro-finance or small/medium scale banking that involved multiple currencies.
Requirements/User Stories
| # | Title | User Story | Importance | Notes |
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| 1 | Deposit in non-base currency to account opened in base-currency | As a bank officer, I wish to accept deposit of money in currency-X to an account opened in base-currency | Must Have | |
| 2 | Deposit in non-base-currency to account opened in another-currency which is not the base-currency | As a bank officer, I wish to accept deposit of money in currency-X to an account opened in currency-Y and currency-X and currency-Y are not the base-currency | Must Have | |
| 3 | Deposit in base-currency to account opened in another currency | As a bank officer, I wish to accept deposit of money in base-currency to an account opened in currency-X | Must Have | |
| 4 | Maintain Exchange Rates | As an operations manager – I wish to maintain the exchange rates between various currencies and the base-currency Add a new currency exchange rate (in relation to base-currency) for a given date Change an existing currency exchange rate (in relation to base-currency) for a given date Delete an existing currency exchange rate (in relation to base-currency) for a given date | Must Have | |
| 5 | Bulk Load of Exchange Rates | As an operations manager – I wish use an excel sheet to import the date-wise exchange rates applicable between various currencies and the base-currency | Good to Have | |
| 6 | Maintain Financial Accounts related for cross-currency transactions | As a head-accountant – I wish to setup the financial accounts that will be used for currency conversions | Must Have | |
| 7 | Enable / Disable Multi-Currency | As a head-accountant – I wish to enable multi-currency financial accounting for my organization – if not enabled, then the current functionality of not allowing cross-currency transactions will continue | Must Have | |
| 8 | Multi-Currency Reporting | As a financial analyst, I need to be able to display our operating currency (DOP) in another currency (USD) for monthly and quarterly reporting (gross portfolio, disbursements, savings balance, write-offs, principal repayments, income, etc.) | Good to Have | Posted by Esperanza (Dominican Republic) |
| <similar use cases needed for loan transactions - repayments> | ||||
| <similar use cases needed for withdrawal transactions> |
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Base-currency must be defined in Mifos.
If cross-currency accounting is enabled, then:
a) The following accounting configurations for Financial Activity Mapping should be specified:
Financial Activity: Currency Exchange Position Account
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b) For the savings products, the following must be set:
Assets: Savings reference – Base-currency, Currency 1, Currency 2, Currency 3 etc.
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Assets: Savings reference per payment Type:
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Payment Type 1 – Base-currency, Currency 1, Currency 2, Currency 3 etc.
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Payment Type 2 – Base-currency, Currency 1, Currency 2, Currency 3 etc.
Etc.
c) For the loan products, the following must be set:
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Payment Type 1 – Base-currency, Currency 1, Currency 2, Currency 3 etc.
Payment Type 2 – Base-currency, Currency 1, Currency 2, Currency 3 etc.
Etc.
Business Transaction Flow: (this section is to be completed)
- Deposits, Withdrawals and Repayments can be done in any currency other than the account currency
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- If account is in base-currency and transaction is done in another currency
- Convert amount in transaction-currency to the base-currency
- If account is in another currency and transaction is done in base-currency
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In the initial scope – Only deposits, withdrawals and repayments will be allowed in multiple currencies. The following will not be supported
- Fees applied and paid in other currencies other than the currency in which the account is opened
- Loan disbursals in other currencies other than the currency in which the account is opened
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