www.loanperformer.com

Table of Contents (Online Help)

Guarantee Settings

This tab enables you to define loan guarantee settings. These settings are defined per Loan Product. The loan products should be previously set at System/Configuration/Products.

Note:
Loan Performer offers three loan guarantee methodologies i.e. "Share based loans", "Savings based loans" and "Tontine based loans". However, institutions ought to know the system implements one methodology at a time and therefore, it is impossible to use two or three methodologies concurrently.

How you define loan guarantee settings

To define loan guarantee settings, go to System/Configuration/Loan Product Settings/Guarantee, the following screen appears:

Shares Based Loans

• Share based loans: When you activate this checkbox, additional options appear to enable you select a shares product and the corresponding percentage required as loan guarantee during loan application under the menu Loan/Loan Application/Loan Entry Part 1.
  • Share amount as % of Individual Loan: In this text-box, enter the percentage of the loan amount that the individual client must have as minimum share balance on the account before accessing a loan.
  • Share amount as % of Group Loan: In this text-box, enter the percentage of the loan amount that the group client must have as minimum share balance on the account before accessing a loan.

Risk levels (%): These risk level percentages are essential when generating the Credit Risk Management report that is used by the Central Bank of Madagascar for interpretation and Credit analysis under the menu Central Risk Management.

• Savings Product: From the drop down menu, select the savings product to tag the loan product displayed.
• % of loan amount needed: Enter here a percentage of the loan amount that should be available on the client's selected savings account as loan guarantee. This percentage amount will be automatically verified by the system and will appear in the field "Savings balance needed" on the loan application screen. See image below.
• % of loan amount needed if old loans (outstanding): The percentage of loan guarantee that is needed for clients without a loan might be different from the one for clients with an outstanding loan. If this is the case, enter here the percentage that will be applicable.

NB: For group loans, Loan Performer will check whether the whole group has the specified savings amount required as loan guarantee if the two options "Tracking of savings at group member level" under the menu System/Configuration/Savings/Savings accounts settings and "Group loan tracking at member level" under the menu System/Configuration/Loan Configuration" are not ticked.

However, if the above options are ticked, then Loan Performer will check at loan application if each group member has sufficient savings on his /her account according to the amount he/she has applied for. See image below

• Guarantee based on loan amount: Tick this checkbox if the loan guarantee will be based on the specific loan amount the client has applied for otherwise it will be based on the class of the loan amount.
• Guarantee based on loan amount classes: Tick this checkbox and another screen pops up. You can use to it to enter loan amount classes.
• Deduct the loan guarantee at disbursement (Individual loans only): Tick the checkbox to deduct the loan guarantee for individuals at disbursement. In the "Deduct" text box enter the percentage of the loan amount that should be deducted as loan guarantee and in the "into" text box select from the drop down the product of the client's savings account to which the guarantee amount will be transferred.

• Note that the client will not be able to withdraw this loan guarantee amount till the loan is fully repaid.
  

• Deduct Loan Guarantee deposit at disbursement (Groups Loans Only): Tick the checkbox to deduct the loan guarantee for group at disbursement. In the "Deduct" text box enter the percentage of the loan amount that should be deducted as loan guarantee and in the "into" text box select from the drop down the product of the group savings account to which the guarantee amount will be transferred.

Collateral and Guarantors

Loan Performer gives you the option of making the guarantor or collateral requirements compulsory for groups or individuals, see the screen below:

• Compulsory collateral for individuals loans: Tick this check box to make the collateral for individual loans compulsory and enter the percentage of the loan amount required as value of collateral under the menu Loan/Loan application/Loan Entry Part 3 Individuals and specify at what point during the loan application process the collateral should be availed. This can either be at Application, Approval or Disbursement.
• Compulsory guarantor for individual loans: Tick this box to make the guarantor on individual loans compulsory and enter in the textbook the percentage of the loan amount to be covered by the guarantor Loan/Loan application/Loan Entry Part 3 Individuals.
• Compulsory collateral for group loans: Tick this check box to make the collateral for group loans compulsory and enter the percentage of the loan amount required as value of collateral under the menu Loan/Loan application/Loan Entry Part 4 Groups and specify at what point during the loan application process the collateral should be availed. This can either be at Application, Approval or Disbursement.

Tontine based loans

• Tontine based loans: Select this option to activate the tontine loan guarantee methodology and then select the tontine product that will be linked to the loans product as guarantee during loan application under the menu Loan/Loan Application/Loan Entry Part 1.
• % of loan amount required: Enter here a percentage of the loan amount that should be available on the client's selected tontine account as loan guarantee e.g. "10%". This percentage amount will be automatically verified by the system and will appear in the field "Tontine balance needed" on the loan application screen.

Click on the Save button to save the settings and on the Close button to exit the menu.

Related Topics

Contact LPF live support for more information
This service requires an Internet connection.