About Loan Accounts
A loan account is an instance of a loan product. A loan account has a unique account number, a specified interest rate, and it is owned by one, and only one, client or group.
A loan account can be created for an active client or group based on a loan product that is active on the submitted date. When a loan account is created, it inherits the rules and defaults from the loan product. Your financial institution may allow some of the inherited information to be modified for a loan account, depending on how the loan product is defined.
Existing loan accounts are unaffected when the loan product they are based upon is changed.
A client may have more than one active loan account as defined by a financial institution's policies, configured in the Product Mix.
In the case of a group loan application, individual client loan accounts belonging to members of the group are included for the purposes of applying product mix rules.
The loan account lifecycle is illustrated in the Mifos X Loan Account Lifecycle diagram. Loan account states are visually indicated in Mifos X using the color scheme illustrated in the Mifos X Loan Account Lifecycle diagram.
Figure Mifos X Loan Account Lifecycle
The loan account actions / transactions availability and affect on the loan account lifecycle state are:
| Previous State | Action / Transaction | Resulting State |
|---|---|---|
| N/A | Add Loan | Pending Approval |
| Pending Approval | Add Loan Charge Approve Modify Application Reject Assign Loan Officer Withdrawn by client Delete Add Collateral Guarantor Loan Screen Reports | Pending Approval Approved Pending Approval Cancel (Rejected) Pending Approval Cancel (Withdrawn) N/A Pending Approval Pending Approval Pending Approval |
| Approved | Assign Loan Officer Disburse Disburse to Savings Undo Approval Add Loan Charge Guarantor Loan Screen Reports | Approved Active Active Pending Approval Approved Approved Approved |
| Active | Add Loan Charge Make Repayment Undo Disbursal Waive Interest Write-Off Close (as Rescheduled) Close Loan Screen Reports | Active Active Approved Active Closed (Written Off) Closed (Rescheduled) Closed (Obligation Met) or Closed (Overpaid) Active |
An active loan account in good standing is indicated by a green status. A active loan account that is not in good standing is indicated by a red status.
Group Loan Accounts
There are two main types of loan account for groups: a group loan and a joint liability group (JLG) loan.
Group Loan account: A group loan account is a single loan account shared by all members of a group. Members of the group are jointly responsible for repaying the loan. The group is treated collectively by the financial institution as a single entity. (This is feature is useful for Bank linkage programs, where Nationalized Banks provide loan to a group rather than to member and as group need to repay the loan example, SHGs)
JLG (Joint Liability Group) loan account: A JLG loan account belongs to an individual client who is a member of a group. The client who holds the loan account has primary responsibility for repaying the loan, but the group, in effect, guarantees the loan. This is feature is useful for financial institutions that follow the Grameen, or similar, methodology (center, group, and joint liability group loans). JLG loan accounts are similar to an individual loan account, but individual loan accounts do not appear in the collection sheet.
Loan Repayment
Mifos X enables individual and group processes for loan repayment.
Individual loan repayments are recorded against one loan account at time using the Make Repayment transaction. Individual loan repayments may also be made by transferring funds from a Saving account to a Loan account based on an active standing order.
Group repayment processes leverage the collection sheet, which is a bulk processing methodology for group and joint liability group loans repayments, including associated fees and penalties.
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