Lending to members · Lesson 8 of 15

Loan products for members

We build Maendeleo Loan, an example product for members under Operations → Loan Products: 1.5% a month on the reducing balance, 3 to 24 months, 100,000 to 5,000,000 shillings repaid monthly, a 1% processing fee and a late penalty. It keeps the organization's savings multiplier and requires active membership, a guarantor and NIDA.

About 15 minutes

Key ideas

1

Create the product

In a SACCOS, Loan Products is under Operations; choose the plus button to open a new product. Give it a name and a code, then set the interest: in our example, Maendeleo Loan, code ML01, at 1.5% a month on the reducing balance, so interest is worked out on what the member still owes.

2

Limits, fees and late payment

Set the shortest and longest term, the smallest and largest amount, and how often members repay. In our example: 3 to 24 months, 100,000 to 5,000,000 shillings, repaid monthly. Then add a processing fee, here 1% taken off the payout, and a late payment penalty that starts after a grace period, here 3 days.

3

The savings multiplier

Leave Savings multiplier override blank and the product uses the organization default from Settings → Organization Type and Policy: in our example, members borrow up to three times their savings. A figure entered here would apply to this product's loans instead.

4

Requirements

Under Requirements, tick what every loan on the product needs. In our example: Active SACCO membership required, Guarantor required and National ID (NIDA). Then choose Save product.

Practice

Try it in your training organization

  1. 1. Open Operations → Loan Products and choose the plus button.
  2. 2. Enter a training product, for example Maendeleo Loan, code ML01, an Interest rate of 1.5 a month and the Reducing balance method.
  3. 3. Set the term from 3 to 24 months, the amount from 100,000 to 5,000,000 and the Repayment frequency to Monthly.
  4. 4. Choose Add fee or add-on and add a 1% Processing fee, taken off the payout.
  5. 5. Under Late payment policy, set a penalty with a Grace period (days) of 3.
  6. 6. Leave Savings multiplier override blank so the product uses the organization default.
  7. 7. Tick Active SACCO membership required, Guarantor required and National ID (NIDA), then choose Save product.

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