THIS IS A TEST INSTANCE. ALL YOUR CHANGES WILL BE LOST!!!!
...
| Page properties | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Goals
- Allow Fineract to support basic open-ended credit, i.e, a loan account on which borrows can make multiple withdrawals subject to the total balance being lesser than a predefined limit.
Background and strategic fit
Fineract 1.x has good support for term loans , i.e loans wherein a complete repayment schedule is generated at the time of approval/disbursal. However, it lacks support for revolving credit / line of credits / open ended loans like credit cards. Introducing the same in Fineract-CN would help differentiate it from Fineract 1.x and encourage users having these requirements to implement Fineract-CN
Assumptions
The specification isn't comprehensive and does not deal with builds on top of functionality already present in Fineract 1.x / enterprise forks of Fineract 1.x which are a pre-requisite to support an LOC (Line of Credit) product in its entirety, which include
...
The specification instead focuses on the additional features required in the loan module to support open-ended credit
Requirements
| # | Title | User Story | Importance | Notes |
|---|---|---|---|---|
| 1 | Set product credit limits | As an org user, I must be able to set the max credit limit for an open-ended LOC product | Must Have | |
| 2 | Set product repayment frequency and rules for payment amounts | As an org user, I must be able to set the permitted frequencies for the repayment on the LOC product along with the minimum payment amount defined as one of the following
| Must Have | |
| 3 | Associate LOC account to customer level overdraft facility | As a loan officer, I must be able to optionally associate a LOC account to an existing customer level overdraft facility. Once I have done the same, the credit limit of this account is determined by the limit associated with the overdraft facility and the balance of other accounts linked to this facility. | Nice to Have | Some institutions allow creating multiple customer level overdraft facilities. The customer can then have multiple accounts linked to each such facility. |
| 4 | Full flexibility to update interest rates on active loc accounts | As a loan officer, in addition to associate indexed interest rates to LOC accounts, I must be able to edit the applicable interest rate on an active LOC account. While doing so, I should not have any constraints other than
| Must Have | As open-ended accounts are long running, this is a common requirement. |
| 5 | Create System generates repayment schedule entry on payment due date | As a system user, I should be able to view details of the scheduled repayment on the morning of each a LOC account on the repayment due date. This schedule entry should be created as a part of the daily system batch jobs which updates the payment amount based on the rules for payment associated with the this account by a loan officer. | Must Have | A fixed grace period is typically then associated with this new generated repayment schedule entry giving the customer sufficient time to make a payment |
User interaction and design
Questions
Below is a list of questions to be addressed as a result of this requirements document:
| Question | Outcome |
|---|---|
| Do we need support for other common use cases like interest free periods after each tranche etc ? | Yes, for simplicity, all such use cases are kept out of scope for the most basic LOC product |