Transfer from Savings account  for loan repayments and fee payments

Contents:

1.Introduction

MFIs want the ability to recover fees and loan repayments from Savings Accounts especially in default cases or a member of a group may exit and give instructions his/her savings transferred to another member.

Mifos does not support this functionality currently and MFIs who wish to recover loan instalments from savings are forced to make a withdrawal then apply payment to the loan.

For proper reporting, MFIs need to differentiate direct payments to the loan accounts and transfers

Goals

List Goals of feature

• Ability to apply loan payment from savings account.
• Ability to pay for client charges from savings.

Non-Goals

The following items will not be addressed in this release:

• Ability to transfer funds from one savings account to another.-- this will be taken up in the next release.
• Ability to apply payment for a loan by using the savings account balance of a different client/group
• Transfer of payments from multiple savings account
• Making payments using the transfer option from the collection sheet.

Definitions and Terminology

• Mandatory fields will be preceded by "*" (an asterisk)
• Links are italicized
• Buttons are Button

Related Documents

*insert links to related specs here

2.User Stories

List high level user stories - these can be broken down later into small user stories / user tasks if needed

3.Use Cases

3.1 New Permission : Can make payments to the account using Savings Account

Actors

• Mifos Administrator with sufficient permission to assign permissions to roles

Preconditions

• The Mifos administrator is logged into the system using the credentials provided

Basic Flow

1. User logs into Mifos 
2. User navigates to the Admin screen -> Manage roles and responsibilities
3. Clicks on the link "New role"
4. Navigates to the Loan management ->Loan transactions

Post-conditions

• A new permission  "Can make payment to the account using Savings Account Transfer" is listed under the loan transactions permissions.
• Mifos administrator should be able to choose the permission and submit the same

Alternative Flows

1. User logs into Mifos 
2. User navigates to the Admin screen -> Manage roles and responsibilities
3. Clicks on the link of an existing role
4. Navigates to the Loan management ->Loan transactions

Validations

3.2 New default accepted payment type "Transfer from Savings Account"

Actors

• Mifos user with permission to make loan and fee payments

Preconditions

• A loan has already been created, disbursed and approved.

Basic Flow

1. User logs into Mifos and navigates to the loan summary page
2. Clicks on the "Apply payment" option
3. User clicks on the "mode of payment" dropdown

Post-conditions

• "Transfer from Savings" should be visible as a payment option in the dropdown

Alternative Flows

Validations

3.3 View Savings account associated with client/group in the "apply payment" screen

Actors

• Mifos user with permission to make loan and fee payments

Preconditions

• A loan has already been created, disbursed and approved with a repayment due
• "Can make payment to the account using Savings Account Transfer" permission is assigned to the user's role

Basic Flow

1. User logs into Mifos and navigates to the loan summary page
2. Clicks on the "Apply payment" option
3. User clicks on the "mode of payment" Dropdown
4. Chooses the "Transfer from Savings Account" option

Post-conditions

• All the available savings accounts associated with the client/group should be visible.
• This should include both Mandatory and voluntary savings account

Alternative Flows

Validations

3.4 Loan repayments using the "transfer from savings account" option

Actors

• Mifos user with permission to make loan and fee payments

Preconditions

• A loan has already been created, disbursed and approved with a repayment due
• The permission "Can make repayments from Savings account" has been assigned for the user's role

Basic Flow

1. User logs into Mifos and navigates to the loan summary page
2. Clicks on the "Apply payment" link
3. User clicks on the "mode of payment" Dropdown
4. Chooses the "Transfer from Savings Account" option
5. All the available savings accounts associated with the client/group should be visible
6. User chooses one of the savings account

Post-conditions

• The savings account details including the account balance is visible 
• The user should be provided the option to enter the amount he wants to pay.
• Entering the amount and clicking on submit should ensure that the savings account balance gets reduced by the amount entered and the payments get applied to the loan account
• The repayment amount entered should follow the loan repayment application hierarchy for Mifos Penalty->Fees->Interest->Principal

Alternative Flows

Validations

1. If the amount entered is greater than available balance in the savings account, then an error "Insufficient Balance in savings account to make the payments" should be displayed

2. If the amount entered is greater than the maximum amount per withdrawal limit on the savings account, an error message "The amount entered exceeds the maximum amount per withdrawal limit on the savings account"  should be displayed.

3.5 Create Transactions for payments made using the "Transfer from savings account" option

Actors

• Mifos user with permission to make loan and fee payments

Preconditions

• A loan has already been created, disbursed and approved with a repayment due
• The permission "Can make repayments from Savings account" should be assigned to the user's role

Basic Flow

1. Log into Mifos and navigates to the loan summary page
2. Click on the "Apply payment" link
3. Click on the "mode of payment" Dropdown
4. Choose the "Transfer from Savings Account" option
5. All the available savings accounts associated with the client/group should be visible
6. Choose the savings account through which you want to make the payments
7. Enter the amount to be paid through the savings account
8. Click on submit

Post-conditions

• A withdrawal entry should be made against the savings account through which the payment is made
• A  payment entry should be made against the loan account with the amounts split across the Penalty->Fee->Interest->Principal hierachy

Alternative Flows

Validations

1. If the amount entered is greater than available balance in the savings account, then an error "Insufficient Balance in savings account to make the payments" should be displayed

2. If the amount entered is greater than the maximum amount per withdrawal limit, an error message "The amount entered exceeds the maximum amount per withdrawal limit on the savings account"  should be displayed.

3.6 Accounting Entries for payments using transfer from savings account

Actors

• Mifos user with permission to make loan and fee payments

Preconditions

• A loan has already been created, disbursed and approved with a repayment due
• The "transfer from savings account" has been created as an accepted payment type
• The savings account through which the loan repayments are being made should have sufficient balance.

Basic Flow

1. User logs into Mifos and navigates to the loan summary page
2. Clicks on the "Apply payment" option
3. User clicks on the "mode of payment" Dropdown
4. Chooses the "Transfer from Savings Account" option
5. All the available savings accounts associated with the client/group should be visible
6. Choose the savings account for making the payments
7. Enter the amount to be paid out and click on submit

Post-conditions

• If the savings account choosen for transfer is Mandatory,
  • a Debit entry for the amount entered should be against the Mandatory savings GL account code defined ( in the savings product)
  • a corresponding Credit entry  for the amount entered should be on the loan account GL account code defined ( in the loan product). The credit entry should be split across Principal, interest, fees and penalty appropriately
• If the savings account choosen for transfer is Voluntary, 
  • a Debit entry  for the amount entered should be against the voluntary savings GL account code defined ( in the savings product)
  • a corresponding Credit entry  for the amount entered should be on the loan account GL account code defined ( in the loan product). The credit entry should be split across Principal, interest, fees and penalty appropriately

Alternative Flows

Validations

4. Functional Requirements

4.1 New Permission : Can make payments to the account using Savings Account

4.2 New default accepted payment type "transfer from Savings Account"

4.3 View details of Savings account associated with client/group in the "apply payment" screen

4.4 Create Transactions for payments made using the "transfer from savings account" option

4.5 Accounting Entries for payments using transfer from savings account

Standard Considerations

Security

Impacts to System

Globalization/Localization

Logging

Change Log

Reporting

Provide any relevant information about reporting requirements for the new features and answer the questions below, providing detail to explain any particular area when necessary.

Performance

Setup and Installation

New Installations

Backward Compatibility and Upgrades

Hosting Support

Configuration

Open Issues

• ...

Reviews and Approvals

• ...