Hi Arpita, Thanks for the reply. I just tried a flat rate loan on the Mifos demo server: $1000 @ 10% for 20 weeks. The repayment schedule yielded 20 payments of $52 each which is 4%. The 10% x 20 weeks/52 weeks equals 3.85% rounding to 4%. So it seems on the demo server the entered flat rate is per annum unless I'm missing something.
Thanks, Jeff Looking at Mifos for SEM (http://www.sem-fund.org) Arpita Adhicary wrote: > Hi Jeff, > > 1. Mifos has 3 ways of calculating interest: Flat Rate, Declining Balance > Method and Declining Balance-Equal Principal Installment. > If an MFI uses Flat Rate of interest, then the interest rate is charged > irrespective of the period. Grameen Koota, a Bangalore based MFI using > Mifos have used Flat Interest rate on loans based upon the same logic. > For instance, if a loan of 10000 is given for 10 weeks @ 10%, then the 10% > is for 10 weeks and not p.a. > Thus, Total Interest = > 10000*10% = 1000 > Weekly payable Interest > = 1000/10 = 100 > > Please refer to the following link for more information on interest > calculations: > http://www.mifos.org/knowledge/functional-specs/loans#interest-rate-formulae > > > 2. A fee could be defined at Mifos as One Time (payable Upfront) or > Periodic (payable weekly/monthly depending upon the frequency of the loan). > Now, when a fee is defined for loans, the fee amount could be calculated as > a % of loan amount, (loan+interest) amount or only interest amount. Hence, > fee is something which is charged over and above interest on loans. But if > you wish to charge only fees and no interest on loans, then you can define > a loan product with "0" interest rate and attach a fee to the loan. > > Thus, say a loan of 10000 is given for 10 weeks with a weekly frequency. > And a fee is attached to this loan. The fee amount is calculated as 10% of > the total loan amount. > Thus, the weekly payable Principal = 10000/10 weeks = 1000 > In addition to this, each week, the customer has to pay fee = 10% of 10000 > = 1000 > Hence, the total amount of Installment becomes 1000+1000 = 2000 > > Hope the above information would help you. Please revert back if you need > further clarifications. > > > Thanks & Best Regards, > Arpita Adhicary > Business AnalystIBM India Pvt. Ltd. > 2nd Floor, Block A > Embassy Golf Links > Off Indiranagar-Koramangala Ring Road > Bangalore - 560 071 > Mobile: +91-9886754331 > > E-mail: [EMAIL PROTECTED] > > > > Jeff Blue > <[EMAIL PROTECTED] > ail.com> To > Sent by: [EMAIL PROTECTED] > mifos-functional- net > [EMAIL PROTECTED] cc > rceforge.net > Subject > [Mifos-functional] Interest Rate > 29/04/2008 01:27 Entry > > > Please respond to > Mifos functional > discussions > <mifos-functional > @lists.sourceforg > e.net> > > > > > > > Let me try again. Sorry, but I incorrectly described how Mifos expects > the interest rate to be entered. However, I still desire help with how > best to handle my MFI client's service charge/interest rate. SEM charges > a flat rate, say 10%, of the loan amount. That's 10% of the total loan > amount regardless of whether the loan term is 3 months or 24 months. It > is not 10% per year. The payment of that charge is spread evenly over > the installments. > > SEM would like to avoid their loan officers having to calculate the > equivalent APR interest rate. I looked at defining the charge as a fee > instead of the loan service charge/interest rate in the Mifos demo. If I > define the fee as a one-time fee, it is not spread over the > installments. If I define the fee as periodic, the rate entered is per > installment. Is there a way for this service charge to be entered as 10% > and have payment spread over the installments? Any suggestions? > > Thank you, > Jeff > > > ------------------------------------------------------------------------- > This SF.net email is sponsored by the 2008 JavaOne(SM) Conference > Don't miss this year's exciting event. There's still time to save $100. > Use priority code J8TL2D2. > http://ad.doubleclick.net/clk;198757673;13503038;p?http://java.sun.com/javaone > > _______________________________________________ > Mifos-functional mailing list > Mifos-functional@lists.sourceforge.net > https://lists.sourceforge.net/lists/listinfo/mifos-functional > > > > > ------------------------------------------------------------------------- This SF.net email is sponsored by the 2008 JavaOne(SM) Conference Don't miss this year's exciting event. There's still time to save $100. Use priority code J8TL2D2. http://ad.doubleclick.net/clk;198757673;13503038;p?http://java.sun.com/javaone _______________________________________________ Mifos-functional mailing list Mifos-functional@lists.sourceforge.net https://lists.sourceforge.net/lists/listinfo/mifos-functional
