[
http://mifosforge.jira.com/browse/MIFOS-5182?page=com.atlassian.jira.plugin.system.issuetabpanels:all-tabpanel
]
Lukasz Chudy updated MIFOS-5182:
--------------------------------
Description:
There is a need to have an option to do a "monthly interest calculation".
Detailed requirement and example below:
There are 2 loans (with monthly installments) which are handled as follows in
real-life:
Loan 1:
February-2011 - Disbursed - 10,00,000 at 2% per month
March-2011 - Interest paid - 20,000
April-2011 - Interest paid - 20,000
May-2011 - Loan repaid paid with interest - 10,20,000
I schedule this as a loan product with interest type as "diminishing
balance" and with 2 "principal-only grace" periods. This works fine in Mifos.
Loan 2: Is similar, except that the customer does some prepayments.
May-2011 - New Loan disbursed - 40,00,000 at 2% per month
June-2011 - Interest paid - 80,000
July-2011 - Interest paid - 80,000
August-2011 - Interest paid - 80,000, Principal repaid 5,00,000
(principal outstanding is now 35,00,000)
September-2011 - Interest paid - 70,000, Principal repaid 10,00,000
(principal outstanding is now 25,00,000)
October-2011 - Interest paid - 50,000, Principal repaid 15,00,000
(principal outstanding is now 10,00,000)
Nov-2011 - Interest paid - 20,000
I am not able to configure Loan-2 in Mifos. Ideally, the pre-payments should be
adjusted to the principal. But mifos accounts prepayments against future
interest, if I use interest type as "diminishing balance".
If I use the interest type as "diminishing balance with interest
recalculation", Mifos computes the interest based on daily-reducing balance. So
the interest due for Feb, will be less than interest due for April. Which will
not help implementing the above scenario. And with this type of interest, Grace
periods are not supported. So it is impossible to implement such a loan in
Mifos.
Mifos should be enhanced and Principal Pre-payment option for "Declining
Balance" and "Declinging Balance - Equal Principal Installment" interest types
should be added.
The following remarks should be implemented:
a) The "Principal Re-payment" link should be visible only for "Declining
Balance" and "Declinging Balance - Equal Principal Installment" interest types
(this does not make sense for both "flat" and "declining balance with interest
recalculation" interest types)
b) We need to handle the situation where user applies a payment for interest on
a date and then on the same date does a "Principal Repayment" too.
c) We need to handle the situation where principal-repayment is done on a
non-meeting date (i.e. on a date on which there is no entry in the
loan_schedule table).
d) We need to handle the situation where for a six month loan, only interest
was paid for 8 months and then the principal was repaid. I.e. the duration of
the loan went beyond what was entered into loan_schedule table by Mifos.
e) View all account activity should show entry for "Principal Re-payments"
was:
Currently "declining balance with interest recalculation" does a daily interest
recalculation. There is a need to have an option to do a "monthly interest
calculation". Detailed requirement and example below:
There are 2 loans (with monthly installments) which are handled as follows in
real-life:
Loan 1:
February-2011 - Disbursed - 10,00,000 at 2% per month
March-2011 - Interest paid - 20,000
April-2011 - Interest paid - 20,000
May-2011 - Loan repaid paid with interest - 10,20,000
I schedule this as a loan product with interest type as "diminishing
balance" and with 2 "principal-only grace" periods. This works fine in Mifos.
Loan 2: Is similar, except that the customer does some prepayments.
May-2011 - New Loan disbursed - 40,00,000 at 2% per month
June-2011 - Interest paid - 80,000
July-2011 - Interest paid - 80,000
August-2011 - Interest paid - 80,000, Principal repaid 5,00,000
(principal outstanding is now 35,00,000)
September-2011 - Interest paid - 70,000, Principal repaid 10,00,000
(principal outstanding is now 25,00,000)
October-2011 - Interest paid - 50,000, Principal repaid 15,00,000
(principal outstanding is now 10,00,000)
Nov-2011 - Interest paid - 20,000
I am not able to configure Loan-2 in Mifos. Ideally, the pre-payments should be
adjusted to the principal. But mifos accounts prepayments against future
interest, if I use interest type as "diminishing balance".
If I use the interest type as "diminishing balance with interest
recalculation", Mifos computes the interest based on daily-reducing balance. So
the interest due for Feb, will be less than interest due for April. Which will
not help implementing the above scenario. And with this type of interest, Grace
periods are not supported. So it is impossible to implement such a loan in
Mifos.
My understanding of the solution in Mifos, will need 2 enhancements:
a) Along with "daily declining balance with interest recalculation", we need a
"monthly declining balance with interest recalculation"
b) We need "Principal Only Grace periods" to be allowed for interest type
"Declining balance with interest recalculation". Currently, Mifos does not
allow this. There is already a ticket for this at: MIFOS-4742
Summary: Add Principal Pre-payment option for "Declining Balance" and
"Declinging Balance - Equal Principal Installment" interest types (was:
DECLINING BALANCE WITH INTEREST RECALCULATION - NEED TO SUPPORT MONTHLY OPTION)
> Add Principal Pre-payment option for "Declining Balance" and "Declinging
> Balance - Equal Principal Installment" interest types
> ------------------------------------------------------------------------------------------------------------------------------
>
> Key: MIFOS-5182
> URL: http://mifosforge.jira.com/browse/MIFOS-5182
> Project: mifos
> Issue Type: Improvement
> Reporter: Binny Gopinath Sreevas
> Assignee: Paweł Gesek
> Priority: Blocker
> Labels: community, fina2
> Fix For: Margaret H, 2.3.2
>
> Attachments: SampleLoanCalculation_MonthlyReducing_V02.xlsx,
> SampleLoanCalculation_MonthlyReducing.xlsx
>
> Original Estimate: 4 weeks
> Remaining Estimate: 4 weeks
>
> There is a need to have an option to do a "monthly interest calculation".
> Detailed requirement and example below:
> There are 2 loans (with monthly installments) which are handled as follows in
> real-life:
> Loan 1:
> February-2011 - Disbursed - 10,00,000 at 2% per month
> March-2011 - Interest paid - 20,000
> April-2011 - Interest paid - 20,000
> May-2011 - Loan repaid paid with interest - 10,20,000
> I schedule this as a loan product with interest type as "diminishing
> balance" and with 2 "principal-only grace" periods. This works fine in Mifos.
> Loan 2: Is similar, except that the customer does some prepayments.
> May-2011 - New Loan disbursed - 40,00,000 at 2% per month
> June-2011 - Interest paid - 80,000
> July-2011 - Interest paid - 80,000
> August-2011 - Interest paid - 80,000, Principal repaid 5,00,000
> (principal outstanding is now 35,00,000)
> September-2011 - Interest paid - 70,000, Principal repaid 10,00,000
> (principal outstanding is now 25,00,000)
> October-2011 - Interest paid - 50,000, Principal repaid 15,00,000
> (principal outstanding is now 10,00,000)
> Nov-2011 - Interest paid - 20,000
>
> I am not able to configure Loan-2 in Mifos. Ideally, the pre-payments should
> be adjusted to the principal. But mifos accounts prepayments against future
> interest, if I use interest type as "diminishing balance".
>
> If I use the interest type as "diminishing balance with interest
> recalculation", Mifos computes the interest based on daily-reducing balance.
> So the interest due for Feb, will be less than interest due for April. Which
> will not help implementing the above scenario. And with this type of
> interest, Grace periods are not supported. So it is impossible to implement
> such a loan in Mifos.
> Mifos should be enhanced and Principal Pre-payment option for "Declining
> Balance" and "Declinging Balance - Equal Principal Installment" interest
> types should be added.
> The following remarks should be implemented:
> a) The "Principal Re-payment" link should be visible only for "Declining
> Balance" and "Declinging Balance - Equal Principal Installment" interest
> types (this does not make sense for both "flat" and "declining balance with
> interest recalculation" interest types)
> b) We need to handle the situation where user applies a payment for interest
> on a date and then on the same date does a "Principal Repayment" too.
> c) We need to handle the situation where principal-repayment is done on a
> non-meeting date (i.e. on a date on which there is no entry in the
> loan_schedule table).
> d) We need to handle the situation where for a six month loan, only interest
> was paid for 8 months and then the principal was repaid. I.e. the duration of
> the loan went beyond what was entered into loan_schedule table by Mifos.
> e) View all account activity should show entry for "Principal Re-payments"
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