🔹Loan Settings

The loan settings section is where you configure loan products, general settings, collateral categories, and loan provisions.

Loan Products

Select 'Loan Settings', click 'Loan Products' then 'Add New Loan Product', fill in the appropriate information, and save.

Adding a New Loan Product

To create a new loan product, go to Loan Settings → Loan Products → Add Loan Product. You’ll fill in three key sections: Loan Details, Loan Qualifications & Requirements, and Penalty & Settlement.

1. Loan Details

• Loan Product Name: Enter the name of the product (e.g., Business Loan, School Fees Loan).

• Currency: Select the currency your institution uses.

• Interest Rate Type: Choose whether interest is charged annually or monthly.

• Interest Rate (Per Annum): Enter the annual rate in percentage.

• Frequency: Select how often clients repay — daily, weekly, bi-weekly, bi-monthly, annually or monthly.

• Interest Method: Choose Flat, Reducing Balance, or Amortization depending on your institution’s model.

• Loan Fees: Select any applicable fees such as processing fees or insurance fees.

• All Branches: Choose Yes if the loan is available to all branches.

• Deferred Payment Period: This allows a grace period before loan repayments begin — the number of days entered here is added to the loan schedule. For example, if you disburse on the 1st, the repayment schedule starts after the deferred days you set.

Optional fields:

• Enable Interest-Only Payments: Allows clients to pay interest only for part of the schedule.

  • When approving such loans, you’ll specify what percentage of the schedule will be interest-only.

  • The system automatically adjusts the repayment schedule — you can’t pick random months manually.

• Enable Automatic Loan Renewal: Automatically extends loans that pass maturity if not yet cleared.

2. Loan Qualifications & Requirements

This section defines what qualifies a client for this product..

3. Penalty & Settlement

Set up how penalties and repayments are handled:

• Enable Penalty: Turn Yes if late payments attract penalties.

• Penalty Type: Choose between Fixed Amount or Rate.

• Grace Period Days: Number of days before penalties start applying.

• Maximum Penalty Days: Limit for how long penalties can accumulate.

• Penalty Frequency: How often penalties are charged (e.g., daily, monthly).

• Penalty Timing: Choose if penalties apply during or after the loan term.

Optional:

• Activate Automatic Loan Payments: Automatically deducts due amounts from client savings.

• Activate Automatic Penalty Payments: Automatically deducts penalties from savings.

• Round off installment decimals: Ensures smooth rounding for repayment schedules.

General Settings

Loan Top-up

Click 'System Settings', then 'Loan Settings', and select 'General Settings' to create a new loan or top up the principle.

When one makes a loan top-up, they can either create a new loan or choose to increase the current principal amount.

Mandatory Savings

Under 'Loan Settings', select 'General Settings' then select 'Mandatory Savings' in order to add the percentage of money that a client adds to their loan payment that will go into their savings.

Loan in Arrear Reminder

In order to set up an automatic SMS reminder for overdue payments, follow these steps: Go to 'Loan Settings', select 'General Settings', and choose 'Loan in Arrear'. Then, specify the number of days after which the client should be reminded. For instance, if you set it to 2 days, the client will receive an automatic SMS reminder every 2 days in case they are late on their payment.

Loan Write-Off

Go to 'General Settings' and select 'Loan Write-offs'. Set the number of days before requesting a loan write-off.

Loan Limitations

You have the ability to determine how the system manages clients who request multiple loans. There are three options available under Loan Disbursement Limit Per Client:

• One loan per borrower per loan product: The client can have multiple loans, but each must belong to a different loan product.

• One loan per borrower regardless of loan product: The client can only have one active loan in total, regardless of the loan product type.

• Allow multiple loans under the same loan product: The client can have more than one active loan under the same loan product, giving more flexibility to institutions that allow repeat or parallel borrowing.

Loan Term Assumptions

This is to set your own loan assumptions so that you can align your loan collection process with your operational preferences. For example, if you select '30/360 Method' in days and '4/48 Method' in weeks, it means that your organization follows the calendar of 30 days every month per year regardless of other months like February which has 28/29 days. If you select 'Actual/365 Fixed(No leap year)', it means your organization counts every month as it is.

Early Loan Payoffs

You have the capability to respond to early loan payoffs, so that the system's operations align with our institutions specific loan policies.

'No Early Loan Payoff': This option ensures that clients pay the full agreed-upon interest, regardless of how soon the loan is paid off.

'Early Loan Payoff with Penalty': This option allows clients to pay interest only for the period during which they had the loan, in addition to a penalty fee for early payoff.

'Early Loan Payoff with no Penalty': This option allows clients to pay interest only for the period during which they had the loan, with no additional penalty for early payoff.

Late Payments

This feature lets you decide how to handle missed loan repayments. You can either follow the original repayment schedule or clear any outstanding interest first before paying the principal.

• Follow Loan Schedule: Payments are split between interest and principal as per the original plan.

• Clear Outstanding Interest First: Payments go to late interest first, then the balance is applied to the principal.

Loan Repayment Fees

This option lets repayment fees appear in the loan schedule and be added to the installment amount. To enable it, tick “Show loan repayment fees on loan schedule.”

Loan Eligibility Parameters

Mainly for government workers, this setting lets you set the minimum take-home pay. Loan installments cannot exceed 60% of salary, ensuring that at least 40% of the salary remains after all deductions for the employee to take home.

Loan Provisions

You can set aside a portion of funds as loan provisions to cover potential loan losses. The system automatically calculates and reserves these funds, reducing the risk of financial shortfalls. By managing your loan provisions effectively, you ensure your organization's financial stability and security.