Hi Emily,
At the moment we do not yet have details of the needed functionality. I will
be working on them this week together with my colleague. It will take me a
few days to work out the real details of what we need. As of now I only know
we highly likely need to recalculate interest on a daily basis for the
following items:
- Early repayment
- Late repayment
- Overdraft products
- Accrual accounting
- Regulations which has to do with loan provisioning (if I use the
terminology right in English)
- Liquidity management on a weekly basis
Some of these are solvable by reporting and calculating, but others will
become difficult if the system is not daily recalculating the real interest
which our clients owe us.
The specifications in the following text are ideas we had, they are not
worked out yet, be aware of that when you read it:
Your questions are very valid, we had indeed initially in mind that if
somebody payed a few days early the interest due for the coming repayments
are then getting down. Communicating this to the client is a difficulty
because they need to transfer money to us and they do not know the new
amount (one idea is to keep the original schedule and only adjust the last
one so it reflects all the saved money. I will need to do some final checks
on what exactly we need on this one.
With late payments we would send an SMS which says because of late payment
they owe us some more and if they do not pay this difference it will be
added to the loan in total. This can then also be solved at the last payment
where the will pay more then the original schedule. Again details are not
clear.
As you already can see a lot need to be done on the detail part of this
daily interest calculation because it is a tricky thing (business and
technical) and I will do my best to get these as soon as possible.
Cheers,
Oskar
On Sat, Dec 5, 2009 at 12:25 AM, Emily Tucker <[email protected]
> wrote:
> It would be helpful to know how the remaining repayment schedule is
> impacted by the early or late repayment. If I have a repayment for 100
> dollars, 50 is for principal and 50 for interest—if I repay early, I’m
> assuming more of my payment would be applied towards the principal. Given
> that:
>
>
>
> (*) Are all of the remaining repayments recalculated and reduced by the
> reduced principal amount? (unlikely)
>
> (*) If repaid early, is the amount due for that installment less b/c there
> is less interest?
>
> (*) Do the repayment amounts remain the same as originally calculated—and
> there are just fewer repayments at the end?
>
> (*) Or is the amount simply applied towards the next installment—so there
> are no fees/penalties if the customer misses or underpays the next
> installment?
>
> (*) And probably a few other scenarios I haven’t thought of….
>
>
>
> More specifics and details would be helpful!
>
>
>
> Emily.
>
>
>
> *From:* Kay Chau [mailto:[email protected]]
> *Sent:* Friday, December 04, 2009 2:50 PM
> *To:* A good place to start for users or folks new to Mifos.
> *Subject:* [Mifos-users] daily re-calculation of interest
>
>
>
> Hi there
>
>
>
> We are working with an MFI in the community that has the need of
> re-calculation of interest based on what’s been paid by the user and I am
> wondering if anyone else has encountered this and if there is a workaround?
>
>
>
> Basically, they need to recalculate interest on loans on a daily basis so
> that if somebody pays back early it adjust the amount down and if somebody
> pays back later it goes up. Basically the interest would be re-calculated
> daily so if they make an early payment, this interest they’re paying on
> should have decreased. They are planning to use mobile payments and will
> not have payments coupled to meeting schedules. The business reason is they
> want to reward clients who are paying back early.
>
>
>
> Thanks!
>
> Kay
>
>
> ------------------------------------------------------------------------------
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>
>
--
Oskar Himmelreich
IT Officer Musoni
Mobile: +31 (0)6 24284028
Email: [email protected]
Website: www.musoni.eu
Skype: oskarhimm
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