Group loan with individual monitoring

Date last updated: 12 Mar 2008 – Nesrine

UI Screens for this feature are available `here <https://mifos.dev.java.net/source/browse/mifos/documents/ui-workspace/Enda%20UI/25_Jul_2007.zip?rev=11952&view=log>`_.

Conventions

Those conventions will be used in the whole document:

UC: Use Case
Mandatory fields will be proceeded by *
Links are italicized
Buttons are put between brackets : `
Unknown macro: {Button}
`

Feature summary

This feature is to address the following requests: Ability to define/edit/view individual amounts for a group loan.

According to ENDA's processes, the group couldn't be just a collection of clients or the only unit to interact with. The group provides certainly credit worthiness, so that if a member is delinquent, all group members contracting together should be considered as delinquent. However the group couldn't be considered as the primary unit to interact with. An individual monitoring should be provided by the system.

Those are several reasons for this combination requirement: group loan with individual monitoring:

A member could have both a loan within the group (by co-signing with other members) and an individual loan account, which is referred to as "auxiliary" product. If the member is delinquent according to his individual loan, he mustn't affect other group members, and vice versa.
Loans based on previous loan amount and loan cycle: real need to keep individual amount tracking even if the client belongs to a group
Aggregating loans and accounts, and keeping a unique system ID for the group loan

=>Therefore, the group should be the primary unit to interact with for transactions, but individual loan tracking should be applicable.

Background

Currently in Mifos, groups could be either the primary unit that the system interact with (by having a single savings/loan account) or just a collection of individual clients (loans are directly provided to the clients).

Mifos doesn't currently allow group loan account with individual monitoring.

Scope

When implementing group loan with individual monitoring, all transactions (Disbursals, payments, adjustments, bulk entry...etc) will remain at the group level. The only difference between this feature and the current way group loans are implemented is that initial loan account creation will specify the amounts given to each individual and their purposes, and these loans will affect individual performance metrics. Thus, there are no changes in system behavior in terms of how arrears are calculated for group loans.

Feature Description

UC1: Define individual amounts for group loan

Prerequisites

Configuration settings allow group to have loans with individual monitoring

Primary Flow

The user search for the group to whom a new loan account needs to be opened
On the list of search, the user chooses the group and clicks on open new loan account
The user choose the product instance and submit
On the create loan account page, the loan product attributes are displayed
In the group loan account page, the loan amount field is disabled and the purpose of the loan is hidden
A new section is displayed with the following information: _ Account owner: Name and government ID as a read only information (If government ID is not configured as mandatory in the system, it should be hidden on the individual details section) _ Loan Amount: As a number field which couldn't be left blank _ Purpose of the loan: As a dropdown mandatory field. The look up options are those defined by the MFI. _ In this section only active group members are displayed
The user selects the members which will co-sign for the group loan together, and define for each one the loan amount and the loan purpose
The total group loan amount is displayed on the group loan account interface. It will be the sum of individual amounts. This amount is automatically generated by the system as a read only information
The user enters the group loan account information which percolate to all members that will co-sign together
The user clicks on continue
Before displaying the confirmation page, the system should perform: _ whether the number of selected members is at least two _ Whether the sum of individual amounts is in the range of allowed amounts for the chosen instance (applicable to the group) * When submitting the group loan creation, the system should perform the following:

Post-conditions:

The system should create an association between members co-signing together
The system should keep tracking on individual amounts
If the group loan is configured as to be included in loan cycle, the system should keep tracking on the individual loan cycle
Performance metrics will be calculated as described below under additional information
On the clients' details pages, the number of active loans should obviously match with the loans listed . The group loan should be displayed on each client page under the group loan section (The link is leading to the group details-UI prototype)

Alternate Flow

When opening a new loan account,if the group doesn't contain any member, an appropriate error should be displayed on the loan creation page

Error text: A group loan cannot be created because there are no clients associated with this group.

When saving, if amounts and purposes are entered without selecting members, an appropriate error should be displayed on the loan creation page

Error text: You have entered individual loan amounts and purposes without selecting individuals. Select the checkbox next to the individual to include them in the group loan.

When saving, if the number of the selected members isn't at least two, an appropriate error should be displayed on the loan creation page

Error text: You must select at least two individuals in the "Individual details" section below to create a group loan

When saving, if the sum of individual amounts is not in the range of allowed amounts for the chosen instance (applicable to the group), an appropriate error is displayed.

Error text: The sum of the amounts specified for each individual exceeds the allowable total amount for this loan product. Enter individual amounts so that the total amount is between [min amount] and [max amount]

When saving, if mandatory fields are left blank, an appropriate error should be displayed on the loan creation page

UC2: View / Edit individual details

Prerequisites

Configuration settings allow groups to have loans with individual monitoring
The loan amount and the loan purpose are un-editable after the group loan account enter an active state
The client combination (members co-signing together) is un-editable after the group loan account enter "application approved" state. The checkboxes should be disabled in states greater than or equal to "application approved"

Primary Flow

The user searches for the group loan account which individual details are to modify
On the group loan account page, the user clicks on Edit loan account information
The Edit loan account information page is displayed with data previously defined
If new members are assigned to the group, the list of members displayed on the individual details section should be updated with active ones, when loan account status is lower than application approved
If the group loan account status is: "partial application", "pending approval", "disbursed to LO" or "approved", the user could modify either the loan amount, or the loan purpose or both of them for the previously chosen clients (by keeping the same combination of clients)
When submitting, the system should perform whether the new entered amounts are in the range of the allowed amounts, else an appropriate error should be displayed
When validating, the system should perform the following updates when displaying the group loan account page

Post-conditions:

The total amount is recalculated for the new entered data
Performance metrics need to be updated
New entries should be made in the change log page to capture details about the data modifications

Alternate Flow

If the group loan account status is lower than application approved, the user could choose a new combination of group members to include in the loan. Thus the system should perform the same validations as for define individual details UC1

UI Screens

This feature will be handled through the group loan account creation pipeline
Configurations settings will be handled through the config file

Additional information

Configuration settings: Configuration is handled via database (per Mifos-dev listserv 23-May-2008) using this line: update config_key_value_integer set configuration_value=1 where configuration_key='loanIndividualMonitoringIsEnabled'; _ If this configuration is turned on, a new section for individual details will be displayed on the group loan creation page. Thus, the group loan amount is henceforth generated automatically by the system based on the individual loan amounts and the loan purpose at the group loan account page will be hidden _ If this configuration is turned off, the group loan will be managed as it was previously bu the system * View configuration settings should display what is defined in the config file for group loan with individual monitoring (UI Prototype)
Loan disbursal: At disbursal, the system should perform the product Mix validation. Therefore, the system should check whether members co-signing together have active loan accounts, and whether the related loan products could coexist with the chosen group product instance.

NB: If when performing the product mix validation, it turns out that the combination of members should be changed, the laon should be cancelled since its status is application approved

Performance metrics:

Group metrics:

Average loan size for individual members = Sum of active loan amount for all client loan accounts / Number of active client loan accounts
The sum of active loan amount for all client loan accounts should include the amount of active group loan if individual monitoring is applicable Number of active client loan accounts should also be incremented when the clients contract a loan within a group, if individual monitoring is applicable.

Individual metrics:

Loan Cycle number: A loan cycle number is incremented when a new loan account is opened for the client. Rescheduling or writing-off a loan decrements the loan cycle count.

The loan cycle should consider the group loan if individual monitoring is applicable.

Amount of last loan: The most recent loan with "closed-- obligations met" status.

If individual monitoring is applicable, individual amount contracted within a group loan should be considered.

Total # of active loans: Loans with 'active in good standing' and 'active in bad standing' statuses.

This should consider group loans if individual monitoring is applicable

Open issues:

If one member among those cosigning together has an active individual loan, when performing the product mix at disbursal, the system will generate an error. Since the group loan status is application approved, it wouldn't be possible to change the group combination. Should we handle this case by adding an appropriate permission to break this situation? (see additional information-NB)
When calculating the delinquent portfolio, overdue and outstanding loan amount should be considered. Since all transactions are at the group level, (consolidated repayment schedule) individual loan schedule data are not available. Is this metric needs to include individual information when contracting a group loan?
Still working on the UI and error text