Hi Jeff,
I agree that the demo server throws up this kind of results on few
occasion.
However, if that be the case and the ineterst rate is per annum, then for
different no. of installments, the interest payable per installment would
remain the same for a given loan with a fixed interest rate.
For instance, in the example that you had mentioned, the interest payable
in each installment would be $2 whether the loan is for 20 weeks or 35
weeks. But the system is not behaving that way right now. Thus, there seems
to be some calculation bugs.
Moreover, as I said earlier Grameen Koota (a Bangalore based MFI using
Mifos) had used flat interest rate with the same logic which SEM uses. That
is, the interest rate is flat irrespective of the duration of the loan.
Hence, Mifos is likely to use this logic too when the calculation bugs fix
up.
Please revert back if you have further clarifications.
Hi Aliya, would be great if you can confirm....
Thanks & Best Regards,
Arpita Adhicary
Business Analyst
IBM 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
Arpita Adhicary/India/[EMAIL PROTECTED]
29/04/2008 19:43 cc
[EMAIL PROTECTED]
net,
[EMAIL PROTECTED]
et
Subject
Re: [Mifos-functional] Interest
Rate Entry
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
