As a part of GSOC-16, I would be working on Mifos credit bureau integration under the guidance of Nayan Ambali.
Overview:
Currently, there is no feature for reporting credit history in Mifos. This module will give ability to clients to check the credit history of the loan applicant and consequently mitigate the risk to bad debt.Along with checking, RCM would also allow client organizations to report to credit bureaus. This feature of Credit reporting and credit checking is optional and may be incorporated based on the requirements of the client organization..
Scope:
After having initial discussion with Equifax, it was found that even if the brand is the same (here Equifax), due to regulatory requirements and other factors, credit bureaus in different country would have different reporting and response standards. Thus initially, we would focus on standards of Indian credit bureaus. Later, after acquiring standards from other regions, we can make minor changes and accommodate credit bureaus from all regions. RCM currently aims to integrate two credit bureaus – Highmark and Equifax. RCM would provide an out-of-box functionality to report credit histories to these credit bureaus. It would also have the ability to fetch report from the credit bureaus and parse it for ready reference of loan officer. This module will report both positive and negative credit history
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Note:
Architecture and description is heavily dependent on credit bureau’s requirements. Currently, I am liaising with Credit Bureaus to figure out their standards and requirements. The description and functionality might slightly vary later from the current version based on interactions with credit bureaus.
Detailed description and deliverables.
RCM in phase one would deliver the following features:
1) It would prepare reports to be uploaded directly to the credit bureau of choice. This feature would be available as scheduled job, using quartz scheduler wherein the client Organization would be able to configure the time and consequently the job would be triggered. Uploading the reports to the credit bureau would mark the end of this job.
2) Currently, two credit bureaus are planned to be integrated – CRIFHighMark and Equifax.
3) The report generated would be viewable for the client.
4) RCM would also give ability to fetch the credit history from the credit bureau.This feature would serve as an interface to request client history for risk evaluation purposes. RCM would send the required identifiers to the credit bureau and then parse the response from the credit bureau.
5) Accessing someone’s credit history is a sensitive operation, and hence the request and response would be logged for audit purposes.
6) The module would not allow the user to request for credit check unless it finds an active loan application in the repository.
7) RCM would also have the functionality to send the credit report to the customer in the event of loan application being denied.
8) In case of self-help groups, RCM would have the ability to fetch bulk reports of individual members. If the majority of the members are not in good standing, the loan officer would be in a good position to make a valid decision.
9) RCM would also have a check in the internal loan history table if the customer has any active/closed loans.
10) Also, the personally identifiable data( identifiers like Adhar,Pancard etc) would be encrypted, to provide additional security coverage.
11) Internal bookkeeping of reports would also be done in new tables in Client Organisation’s repository, which they may wish to contribute to Mifos open source Credit bureau planned in near future.
Long term Goals:
1) In the long run, RCM would be developed as full-fledged risk calibration module for clients wherein loan officers would be able to see the customer’s self-declared debt and also fetch history from credit bureaus in a consolidated view.
2) RCM would also provide the ability to define the eligibility criteria and also display compliance for these criteria by customers.
3) Framework/Module/Wizard would be added to enable clients to add the credit bureau of their choice.
4) Community also has plans to implement a full-fledge, open-source credit bureau in the near future
5) Following additional fields would also be included in Report along with several other recommendations provided in the following report:
http://siteresources.worldbank.org/FINANCIALSECTOR/Resources/Credit_Reporting_text.pdf
Fields:
a) Number of years that the customer has been an account holder or member of the MFI
b) Number of cycles of loans taken out by the customer.
c) Average loan balance over the last 6 months.
d) Average debt/asset ratio maintained over the past 6 months( if Client organisation is accepting deposits as well)
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Timeline and implementation plan:
Until May 21:
1) I have deployed Mifos X and community APP, and the development environment is up and running. I plan to get used to the Mifos code base by May 22, understand already fixed bug patches, and try fixing new ones.
2) Refine the acquired requirements, get feedback from mentor and fellow community members
3) Collaborate with Credit Bureau’s to do POC work: Understand the product offerings, get the format of information exchange (for reporting and parsing the received reports from credit bureau) and get sandbox environment details for Mifos Initiative.
4) Get the design of the screen credit check reviewed.
May 22- June 23
Reporting implementation phase
1) Find the attributes from the Mifos database which can be mapped to the fields in report specified by the Highmark
2) Write code to generate report in a format specified by HighMark and Equifax.
3) Parse the message received from Highmark and represent it appropriately using relevant placeholders on credit check screen.
4) Extend existing access management of product for module.
5) Provide feature to schedule a job to generate reports using quartz scheduler.
June 24-August 15
Request response implementation phase
1) Implement the request – response mechanism, to request and parse the response of credit history.
2) Bulk credit check facility for small self-help group. ( feasibility to be checked)
3) Also implementing the business requirement of checking the loan application and only then process credit check request.
4) Develop the credit check screen for CRIFHigmark and Equifax.
5) Credit check screen will also provide a search for active loan in current organisation.(From m_loan table)
6) Unit testing of new module.
7) Document the usage and functionality of RCM module for ease of usage.