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Table of Contents (Online Help)

General Loan Disbursement

This window enables you to disburse loans that have been approved. After the loan is approved and all other fees (if any) are paid, the loan is then ready for "Disbursement".

Note:

1. The corresponding GL accounts should have been defined under the menu System/Configuration/Loan Product Settings/Loan GL accounts settings part 1.

2. Note that importation of Loan commission is only possible when it is made compulsory under System/Configuration/Loan Product Settings/Fees. Other wise the importation feature will not appear under the menu Loans/Loan Importations. Other fees can also be made compulsory before application, before approval, before disbursement and at disbursement.

3. In the Loan Performer menu "System/Configuration/Loan Product Settings/Fees", you can define the amount and when the loan fees should be levied. This can be at loan application, before approval, after approval or at loan disbursement. You may also tick the corresponding check boxes to make payment of these fees compulsory.

4. When you decide to levy the loan fees before application by specifying the amounts under the menu "System/Configuration/Loan Product Settings/Fees", an additional feature "Loan fees before application"appears in the loans module, otherwise it won't be displayed on the Loan Performer interface.

5. When you decide to levy the loan fees after application by specifying the amounts under the menu "System/Configuration/Loan Product Settings/Fees", an additional feature "Loan fees before approval"appears in the loans module, otherwise it won't be displayed on the Loan Performer interface.

6. When you decide to levy the loan fees before disbursement by specifying the amounts under the menu "System/Configuration/Loan Product Settings/Fees", an additional feature "Loan fees after approval "appears in the loans module, otherwise it won't be displayed on the Loan Performer interface.

7. When you decide to levy the loan fees during disbursement by specifying the amounts under the menu "System/Configuration/Loan Product Settings/Fees", the disbursement screen will appear with the amount specified above, otherwise it won't be displayed on the Loan Performer interface.

How do you disburse a loan

To disburse a loan you go to Loans/Disbursement and the following dialog box appears:

Click on the Choose button to select the Loan Number you want to disburse from the grid e.g. "KA/000043". Then click on Next to continue, the following screen appears:  

• Loan Amount to Disburse: By default, the amount applied for will appear here. You can change it if you are making a Partial disbursement i.e. disbursing less money than what was applied for but it can not be more than the application amount. This is usually for a loan that may be disbursed in phases for instance an agricultural loan disbursed for planting, harvesting and post harvest handling.

• Note that in case of a partial disbursement where the loan is disbursed, let's say, in two installments in two different phases, the loan ledger card will keep the same Loan number and the original loan amount.

• Disbursement date: Enter the disbursement date here e.g. "01/01/2016". Loan Performer checks and makes sure that the date you have entered is not before the date of loan approval or date of payment of loan commission.

• Please note that if at Loan Application you have activated the option "Interest deducted at disbursement" then the "Loan Amount to Disburse" will be less by the loan interest amount. However on the loan ledger card, the disbursement shows that the total loan amount has been disbursed as well as the total interest due on the disbursement date. It also shows a repayment of the interest amount on the same disbursement day. If Accounting is activated, you will notice that Loan Performer booked the interest to the Interest Received account (profit account) at the moment of disbursement (see: Accounts/Retrieve Transactions).

• Voucher: Enter here the payment voucher number e.g. "0000000764". This field can be made compulsory by ticking the option "Voucher number is compulsory at entry of transactions" under System/Configuration/Register Part 2. If  made compulsory, this box will appear in yellow colour.

• However, if you ticked the option "Receipt number should be used as voucher number" under System/Configuration/Receipts/General settings, this field will be read only and the system will generate the voucher numbers automatically that will be similar to the receipt numbers.

• Fees: Enter the fees to pay at the disbursement of the Loan. These can be stationery fees, development fees or Loan processing. These amounts can be predefined/made compulsory by ticking the corresponding check box under the menu System/Configuration/Loan Product Settings/Fees. The fees will be deducted from the loan amount being disbursed.
• Loan Commission: Enter the commission amount here If you charge commission at disbursement. These amounts can be predefined/made compulsory at the menu System/Configuration/Loan Product Settings/Fees. The fees will be deducted from the loan amount being disbursed.

• Note that importation of Loan commission is only possible when it is made compulsory under System/Configuration/Loan Product Settings/Fees. Other wise the importation feature will not appear under the menu Loans/Loan Importations. Other fees can also be made compulsory before application, before approval, before disbursement and at disbursement.

• Balance Disbursed: The loan amount to disburse less the fees and commissions if any will appear here. In the screen above this option is read only. Because there are no stationery fees or loan commission charged, the whole 3,000,000/= will be disbursed.
• Loan Cycle: The loan cycle number is updated automatically in accordance with client's loan history e.g 1 represents first loan, 2 represents second loan etc. It can be made modifiable at the menu System/Configuration/Loans. To know more about Loan cycles, go to System/Configuration/Loan product settings/Loan Cycles .
• Number of jobs expected: Enter the number of work places which are going to be created by the client in the process of loan utilization. This will be useful in evaluation of the progress out of poverty of the beneficiaries under the menu Support files/Poverty Indicators.

• Mode of disbursement: Select the mode of disbursement from the available options e.g "cash". The default disbursement option is defined at the menu System/Configuration/Loans .

• By Cash: Check this option and choose the MFI cash account from the drop-down menu if the disbursement is to be made by cash. Cash accounts must have been defined under System/Configuration/Cash Accounts and the default cash account of a particular LPF user defined under System/Configuration/users/Add a Users .

• By Cheque: Check this option to disburse loans by cheque. The following screen is displayed.

• Bank account: From the drop down menu, select the MFI bank from which the loan amount will be drawn e.g. "Stanbic". You also have to make sure that the Institution's bank accounts are defined at the menu System/Configuration/Banks.
• Cheque number: Enter here the cheque number e.g. "100".

• Please note that for disbursements by cheque with the option "Due dates have to be reported at cheque clearing" (see topic System/Configuration/Loans ) the repayment schedule will be updated not at the disbursement but at the cheque clearing.

• Transfer to savings account: Select this option to transfer the loan to the client's savings account. When this option is selected a screen like one below appears:

• Savings Product: Choose from the drop-down menu the client's savings product where you want to transfer the loan amounts . Ensure that the savings accounts were created under Savings/Open Savings Account.

Transfer to client's bank account: Select this option to transfer the loan to the client's bank account. When this option is selected the following screen appears:

• From A/c: From the drop down menu, select the MFI bank account from which the loan amount will be drawn e.g. "Stanbic"and in the To a/c, select the client's bank account to which the money will be transferred next e.g. "Centenary". The client's bank details should have been entered at registration under Clients/Individual clients/Personal Data.
• Disburse to supplier: Select this option and a creditors selection screen like one below appears:

Note:

1. When you activate the option "Disbursement to supplier", an additional field "Mark up" appears. This shows you the excess amount that will be booked on the mark up GL account defined under the menu System/Configuration/Loan Product Settings/Loan GL accounts settings part 1.

2. The mark up is the difference between the loan amount applied for by the client and the amount paid to the supplier. The loan amount disbursed must be greater than the supplier's invoice amount.

3. The loan is disbursed against the supplier's invoice entered under the menu Accounting/Purchases and Sales/Invoices Received. In this case you have to tick the option "Disbursement to supplier" under the menu Loans/Disbursement, it is basically the concept of Disbursement in kind in Loan Performer.

4. The concept of mark up is favorable to Micro Finance Institutions practicing Islamic banking. In this case, MFIs do not charge interest on loans given to clients. Instead, they prefer to disburse the money directly to the supplier of the goods for which the client took the loan. The loan amount disbursed must be greater than the supplier's invoice amount so that the excess amount is booked on the GL account defined above as mark up. This is basically revenue to the institution for the services rendered to the client. However, the client will have to pay back the full loan amount and not only the amount disbursed to the supplier. It is basically the concept of Disbursement in kind in Loan Performer.

4. You will be able to see the mark up amount received on each loan disbursed to a supplier by consulting the report on disbursements under the menu Loans/Portfolio Reports/Disbursement Report.

• Select the supplier e.g. "Gerald Kagimu" and click on the Pick button. The suppliers or creditors should have been set at Accounts/Purchases and Sales. You will revert to the disbursement screen which will look as follows:

• Disbursement to mobile money client: Select this option to disburse the loan to the client's Mobile phone. When this option is selected the screen will appear as below:

• Before you can disburse to mobile, ensure LPF has been configured to allow disbursement to mobile under System/Configuration/Mobile Banking Set up/Mobile Money Setup. The clients whom you will be disbursing to should have also been registered as a mobile banking and mobile money clients under Clients/Mobile Banking Clients and Clients/Mobile Money Clients. From the drop down select the MFI's mobile money service provider from which you want to disburse the loan e.g. "MTN". To know more about disbursement to mobile go to Disbursement to mobile money client.

• Print receipt: Tick this option to print the receipt after the disbursement of the loan. The receipt settings should have been made under System/Configuration/Receipts. You can make receipt printing after loan disbursement compulsory by activating the check box "Print receipt at disbursement" under System/Configuration/Loans. In this case, the option will be read only.
• Print Loan Contract: Mark this option to print a "Loan Contract". You can make contract printing after loan disbursement compulsory by activating the check box "Print loan contract at disbursement" under System/Configuration/Loans. In this case, the option will be read only. The settings concerning Loan contracts should have been defined under System/Configuration/Loan Product Settings/Contracts.
• Simulation: This button enables you to update the due dates of the loan if the disbursement date is different from application date. When you click on the button the following screen shows up:
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• Do not modify due dates: In this case, the installment dates will not be modified. The original due dates at application will be considered.
• Update due dates with the difference between application date and disbursement date: The installment dates are brought forward by the mentioned difference in the number of days. An option suitable for loans with short installment periods, e.g. daily, weekly, bi-weekly, four-weekly.
• Recalculate due dates based on current disbursement date: This option is suitable for longer installment periods, like monthly loans where the installment date is forwarded by a month.In case of loans on declining balance (See Loan type option i.e Amortization or Discounted), there is an extra option:
• Recalculate dates and amounts based on disbursement date: Since months  don’t always have the same number of days, the interest for loans on declining  balance may need to be recalculated (for declining balance amortization the  principal as well).

• Please note that recalculation will undo all previous modifications of the loan repayment schedule made at Loans/Loan application/Loan entry part 1. Also If at System/Configuration/Set Working Days you have opted for automatic modification of due dates based on working days of your institution, at this point the loan repayment schedule will be updated accordingly

• Put all dates on: of the Month: Select a date of the month that you want all the due dates to start e.g "8". All the due dates will fall the 8th of the month. However if that date falls on a non working day then the system will observe the settings at System/Configuration/Set Working Days. The repayment schedule will appear as below:
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• Click on the Save button to effect the disbursement if you had not simulated.

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