Overview
Mifos X is being sought out by financial co-operative organizations (non-credit union/SACCO) as a solution to support their financial service offerings AND to pay stake holders dividends on their investment.
The following notes are FROM YURIE at Resilient Business Systems. (Full document attached.)
Requirement
- Manage the portfolio of cash advanced to traders, processors, farmers and retailers.
- Integration with both Citi bank core banking systems( flexcube) and in-house developed software
- To have logical grouping/association of entities .i.e. processors, farmers and retailers
- Mifos Integration with their customer’s erp systems.
- Currently Umati Capital Ltd makes cash advances to customers in need of both invoice discounting and Supply chain financing services.
- Umati Capital is currently focused within agri-business supply chains, retailer value chains and fast moving consumer goods manufacturers
Scenario One - when working with the processor. Trader will bring milk to milk processing company. Most traders get cash on delivery. This trader gets invoice for payment in 30 days. Umati Capital will contact the processor and validate the invoice is valid, Umanti then gives the trader cash. 80% goes to trader 20% to Umati. Processor pays Umati 100%
Scenario Two - when working with retailer (e.g. super market). Traders will bring goods to store. Once the goods received by retailer, they are given a 30 day invoice, trader wants their cash now. Umati verifies the invoice, trader receives 80%, Umati receives 20% as processing fee. Retailer pays Umati 100%
Disbursals happen via bank transfer.
Background and strategic fit
Strategic vision of The Mifos Initiative to support financial cooperatives.
Requirements/User Stories
| # | Title | User Story | Importance | Notes |
|---|---|---|---|---|
| 1 | Manage products for Share accounts | As an operations manager, I wish to define a deposit product that will be used to maintain member shares, balances and dividends paid to members | Must Have | |
| 2 | Create share account for member | As operations staff, I wish to create a share account for the member. | Must Have | |
| 3 | Apply for additional shares for member | Stake holders (share holders) have the option to purchase additional shares | Must Have | |
| 4 | Allow Recurring Deposits as share | Share holders may allow a regular recurring deposit transferred from their savings account into a share account | Should | |
| 4 | Calculate dividends based on average daily balance | Dividends should calculate based on average daily balance to parity in payment | Must Have | |
| 6 | Manage configurations for dividend calculations | |||
| 7 | Pre-View Calculated Dividend | Must Have | ||
| 8 | Approve and Post Calculated Dividend | Must Have |
Business Rules
Share accounts will be deposit accounts. There will be no interest rate that is associated to the shares account.
At the time of applying for the share account, the purchase price (unit price and number of shares need to be captured) and any fees will be collected from client. The fee will be an income whereas the purchase price will be held in a suspense account (liability).
Once the application is approved, the amount will move from a suspense account to the liability account.
If application is rejected, the amount is repaid from the suspense account.
Member may purchase additional shares which will follow the same process.
Attributes
| Attribute | Description | Notes |
|---|---|---|
| Number of shares | ||
| Value of shares | ||
Security and Permissions
New permissions needed for the following:
- Create / List / View / Edit Share products
- Create / View / Edit Share accounts
- Apply for Shares
- Post Dividend
- Manage Configurations for Dividend Calculation
- Pre-View Calculated Dividend
- Approve and Post Calculated Dividend
Mifos Functionality Enhancements
New Screens
Share Products:
- Listing
- New/Create
- Edit
Share Accounts:
- All screens similar to Savings account except the following
- Deposit --> to be changed to --> Purchase shares
- Withdraw --> to be changed to --> Redeem shares
- Transfer funds --> to be changed to --> Transfer shares
All transactions to have share reference, number of shares and value of shares
Changes to Existing Screens
Option to create new Share Products from Admin screens
Option to create new Shares account from member screens
Changes/Enhancements to Batch Jobs
A new batch job is needed (which will always be invoked manually) to compute dividends based on average share account balances.
Dividends will be calculated based on the following configurations which may be captured and stored for each period where calculations are to be done:
a) Calculate Dividend for members who are no longer active (True/False)
b) Minimum active period (in days/weeks/months) for member to be eligible for dividend (Numeric + period type)
c) Amount to be distributed or percentage of profits to be distributed
d) Dividend to be calculated based on (Daily balances, monthly balances etc)
e) Balance to be considered between (Two dates)
Changes/Enhancements to Accounting Entries
Additional account heads to be captured (similar to Savings accounts):
- Suspense account for share application money
User interaction and design
Exception Handling
Reporting
APIs
Notes
Questions
Below is a list of questions to be addressed as a result of this requirements document:
| Question | Outcome |
|---|---|