Loans

In mifos, before creating a LoanAccount for a Client or Group, you must create a LoanProduct. There is also some Configuration options around the loan area which affect the creation of LoanProducts and LoanAccounts. These allow the user to change the way loans work at an application level depending on the credit methodology being used.

Default configuration of Loans

By default, the repayment schedule (amortization schedule) for loans is tied to the customer meeting schedule (Grameen Model). Using a configuration option called LSIM (Loan Schedule Independent of Customer Meeting Schedule), it is possible to have a repayment schedule which is not tied to any specific customer meeting schedule.

When LSIM is enabled it is also possible to create a LoanProduct that has Variable Installments enabled which allows users to choose the specific date for each payment period and this was create for loans that need more flexibilty in the payment periods like Agricultural Loans.

Note: there is a constraint however in that the repayment schedule still must match the payment period frequency (weekly/monthly) and so for weekly frequency you can only change the day of the week on which the payment is due, and for monthly, its possible to change the day of the month or the week and day of week in month in which payments are expected to fall.

There is also another configuration option called GLIM which is only applicable to Groups and allows users to create loans for groups but specific monitoring of loan amount given to each individual member of the group (Village Banking).

Loan Product Matrix

The number of installments and interest rate should be same for all loan products.

Default Number of installments: 6
Default Interest Rate (APR): 10%

Loans with no fees/commissions/charges