Product

Mifos in the Philippines

 

 
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Product Definition

Overview

A product is a financial offering to the clients of an MFI. Products are governed by rules specified by the HO, and these rules can be different for different products.

A description of the terminology used in product hierarchy definition and configuration, and the attributes at each level are explained.

Product Hierarchy

A three-level product hierarchy exists in the Mifos system. These are:

  •     Product Types, at the highest level
  •     Product Categories, at the second level
  •     Product Instances, at the lowest or third level

Product Types

Product types are the financial services provided by the MFIs to their clients. These are pre-defined at HO level. System defines the complete behaviour of the product types, but allows the users to change the nomenclature referring these product types.

The system supports following pre-defined product types:

Loans

Loans help fulfilling the goal of MFIs by providing credit to the customers. When customers (clients/groups) express interest in the loan product, LOs explain the terms and conditions of the product. All this is done outside the Mifos system. An active customer (client or group) of the branch can apply for a loan, which is disbursed after a series of offline and online processes.

Before a loan product type is offered to customers, it has to be created and defined.

Savings

Savings provide an instrument to save the clients’ and group’s money with the MFI. This can be done to earn interest, provide as collateral for loans or both.

Product Categories

Product categories are logical groupings of product instances which can be used for reporting purposes. Product categories can be created anytime.

  • System has no limit on the number of product categories that can be created or the number of product instances that can be put in each category. Therefore, a user can create any number of product categories and instances and a product category can have any number of product instances under it.
  • A category called “Other” will be present by default in the Mifos system. If the product instance does not fall into any of the defined product categories, it can be put in the “Other” category. This category can be modified like any other category.

Attributes for Product Category Creation

S. no. attribute name Data type range mandatory/optional can be modified after product category creation  modifications to be applied to all open accounts or to new accounts  description/notes
1. Product Type Drop-Down  Loan/Savings  Mandatory No  N/A  Once a category is saved its product type cannot be changed. 
2.  Category Name  Text (50 char)  None Mandatory  Yes  All closed, open, and new accounts If category name is changed, change takes effect immediately and all reports generated and all transactions recorded after the change takes the new name.
3. Category ID System generated N/A N/A No N/A Unique ID, to be generated by the system.
4. Description Text (250 char) None Optional Yes All closed, open, and new accounts  
6. Status Drop-Down, single select Active; Inactive Mandatory Yes New accounts A category is created in Active status by default. If status is changed from Active to Inactive, existing accounts are not affected, and they can continue to completion under the same product category

Product Instances

At the lowest level of product hierarchy, product instances are the different offerings of a product type to the MFI clients. Product instances are defined in terms of interest rates, minimum and maximum loan amount and purpose of the loan. Personal loan, Agricultural loan, Cattle loan etc, are a few examples of Product Instances. The sections below detail out the flexibility provided by the Mifos system in defining these product instances.

Attributes for Product Instance Definition

The table below lists down the attributes common for loans and savings. Following this, the attributes specific to each product type has been listed down under the respective sections.

s. no. attribute name data type default value range Mandatory/ optional for product instances can be modified after product instance creation modifications to be applied to all open accounts or to new accounts can be modified at account level

description/ notes
1. Product Type Name  N/A  None  Loan/Savings  N/A  No  N/A  No   
2. Product Category  Drop-Down  None  Categories defined for Product Type  Mandatory  Yes  Closed + Open + New Accounts  No  See Product Categories. The change in product category is effective from the point the change was made. 
3. Product Instance Name Alphanumeric (50 chars)  None  None  Mandatory  Yes Closed + Open + New Accounts No Should be unique with the database that it is attached to.  Product Details page should display the full name of the product instance
4. Instance short name  Text (4 chars without spaces) None None Mandatory Yes Closed + Open + New Accounts No  This is for bulk entry, internal reports, UI pull-downs, etc. This has length limits and must be unique within an installation.
5. Description Text None None Mandatory Yes Closed + Open + New Accounts No  This is the brief description of the product instance.  If empty, this attribute name should not appear in the UI.
6. Product Instance Code System ID (string) None None Mandatory No (System generated Uniqued ID) N/A No  This is not to be displayed in the UI.
8. Start Date Date

Today's date

 Current date to one year from current date Mandatory Once the start date is reached and the system has changed the state to “Active”, start date cannot be changed. But it can be changed if product is still in “Inactive” status. All Open and New Accounts - This cannot be changed once any account is created No  Date when the status of the product instance is changed to “Active” by the system and the product instance starts surfacing in the New Loan Creation page.
Effective date of change is collected and state change occurs at 12:01am of the day specified.
9. End Date Date None One year from curent date Mandatory Yes All Open and New Accounts No  New accounts should not be created after the end date has passed.
State change occurs at 11:59 p.m. of the date specified as the end date.
10. Applicable for groups/ clients/ centers Drop down; Single-select  None Clients;
Groups;
Centers		 Mandatory Yes New accounts No  Whether/not product can be given to individuals, groups, or both.
Center’s options are applicable only for savings accounts.
11. Status Drop down  As per the start and end dates  Active; Inactive  N/A  Yes  New accounts  No  During creation of a product instance, status is not user specified. System should create the product in active/inactive states as per the start date.

Product Instance States

Status of a product instance can be changed at the product instance definition level. The changes have to be percolated to all the offices. A product instance can be in one of the following states:

status description
Active Product can be offered to clients and new accounts can be created for the same.
When a product is defined, a start date for the product is provided. Mifos system should change the status of the product to “Active” when the start date is reached.
Inactive The product option disappears from the “Create a new account” pipeline.
Mifos system should change the product status from “Inactive” to “Active” when End date (if defined) of the product is reached.
The product instances are not deleted and can be accessed from the product instances list. 

A product can change the status multiple times. There are no restrictions on state changes.

Attributes for Loan Product Definition

s. no. attribute name data type default value range Mandatory/ optional for product instances can be modified after product instance creation modifications to be applied to all open accounts or to new accounts can be modified at account level

description/ notes
1. Min loan amount Number  None  None Mandatory  Yes New Accounts + current open accounts in Partial, Pending and Cancelled states No   
2. Max loan amount Number  None  None  Mandatory  Yes  New Accounts + current open accounts in Partial, Pending and Cancelled states  No  
3. Default amount Number   None  Optional  Yes  New Accounts  No The value can be overwritten at account level for the particular account 
4. Sources of funds Multi-select  None  Defined by MFI  Optional  Yes  New Accounts + current open accounts in Partial, Pending and Cancelled states  No Multiple sources of funds can be attached to a product instance. 
5. Frequency of installments  Number  1 week  Number of weeks/months  Mandatory  No   New Accounts No If product frequency conflicts with meeting schedule, LO would not be able to assign this product to a client
Frequency can be every N number of weeks or every N number of months.
6. Minimum number of installments  Number 1 None Mandatory  Yes  New Accounts + Current Open Accounts in Partial, Pending and Cancelled states  No The number of installments entered by LO at the account level should be in between the minimum and maximum number of installments specified at the product definition level. 
7. Maximum number of installments  Number  None  None  Mandatory  Yes  New Accounts + Current Open Accounts in Partial, Pending and Cancelled states  No  
8. Default number of installments Number None None  Mandatory  Yes 

New Accounts

 Yes   
9. Interest rate type  Drop Down  None  Flat; Declining Balance  Mandatory Yes  New Accounts No  
10. Principal due on last installment  Check box  None On; Off N/A Yes   New Accounts No If the user pre-pays, system recalculates the interest for all the remaining months if specified in the product definition. 
11. Interest deducted at disbursement Check box  None  On; Off Mandatory    Yes   New Accounts Yes This is applicable for flat interest loans.
• If this attribute is Yes for a product instance, the first repayment date is the same as the loan disbursement date.
• Grace period is not applicable since the repayment starts with loan disbursement. 
12. Max interest rate  Number  None 0 - 99.9%  Mandatory    Yes   New accounts + current open accounts in partial, pending, and cancelled states No Interest rates are annualized percentage, according to the number of days in a year specified at the MFI level.   
13. Min Interest Rate Number  None  0 - 99.9%  Mandatory    Yes   New accounts + current open accounts in partial, pending, and cancelled states No Interest rates are annualized percentage, according to the number of days in a year specified at the MFI level.   
14. Default interest rate Number  None   0 - 99.9%  Mandatory   Yes  New Accounts No

Interest rates are annualized percentage, according to the number of days in a year specified at the MFI level. 
17. Grace period for repayments  Number  None    Mandatory   Yes New Accounts  No This is the grace period for number of days before the accounts are moved to “Active in bad standing”
18. Include in Loan Cycle Counter Drop-down  None  Yes; No  N/A  Yes  All Closed, Open, and New Accounts  No  Yes implies that the product instance is included in the loan cycle counter for clients and groups.
19. Grace period type Drop-down  None 1. None;
2. Grace on all repayments
3. Grace on principal payments only
 Optional Yes New Accounts No   
20. Grace period duration Number of installments None 
Mandatory if options 2 or 3 in the grace period type are selected   Yes New Accounts  Yes   
21. Product GL Code - Principal

Drop Down - With acceptable GL codes for Prinicipal

 None  None  Mandatory  No  New Accounts  No  For loans, one GL Code each should be chosen from a list of acceptable GL Codes for principal. 
22. Product GL Code - Interest  With acceptable GL codes for Interest  None  None  Mandatory  New Accounts  New Accounts  No  For interest, one GL Code each should be chosen from a list of acceptable GL Codes for interest. 
23. Attach Fee Types Multi-select  None  Predefined fee types  Optional  Yes  All open and New Accounts Yes- Only Amount/Rate of the “Upfront” fee types can be modified at the account level.
The changes are applicable only to that account.		 More than one fee types can be linked.
Only fee types applicable to loans are shown in the list box (i.e., for a loan product instance, only fee types applicable to loans are displayed).
The attached fee types are charged to all the accounts opened for that instance.

Attributes for Savings Product Definition

Listed below are the attributes specific to the Savings product type.

s. no. attribute name data type default value range Mandatory/ optional for product instances can be modified after product instance creation modifications to be applied to all open accounts or to new accounts can be modified at account level

description/ notes
1. Type of deposits Drop Down  None  Mandatory/Voluntary Mandatory  Yes New Accounts No So depending on this selection, system should show the correct set of GL codes to select from.  
2. Recommended/ Mandatory Amount for Deposit Number None  None  Optional  Yes  New Accounts  Yes 
3. Recommended deposit unit- per group member or for whole group Drop Down  None  Per group; Complete group  Mandatory  No  New Accounts  No  Applicable only if the product instance is applicable for groups.
This specifies that the amount mentioned in the above attribute is for each member of the group, or an absolute amount for the whole group irrespective of the number of members present in the group.
For center savings account, the unit of recommended amount is always - “per client”. 
4. Interest rate  Number  None  0 - 100 Mandatory Yes All Open and New Accounts No Annualized rate is stored by the system.
In case of change in interest rate, system should calculate the interest using the new rate from the time of  change. . However the old interest rate should be recorded for reporting purposes.
E.g. Supposing the interest is to be posted on a monthly basis and on the 30th day the rate is changed. Interest should be calculated using the old rate for 29 days and use the new rate for 30th day and onwards.
6. Balance used for Interest Rate calculation Drop Down - Single-select None Minimum balance; average balance Mandatory Yes All Open and New Accounts No Only Compound Interest Calculation is supported
If changed, the changes are reflected in the Open accounts as soon as the change is detected by the Mifos system
If the attribute is modified, the interest installments should be recalculated.  
7. Time period for interest rate calculation Number of months; Number of days None   Mandatory Yes All Open and New Accounts No

If this field is modified, recalculation is not required. The change affects the future interest calculations only.

Note: Reference for time period is the start of fiscal year for all product instances.
8. Frequency of interest posting to accounts Number of months None   Mandatory Yes All Open and New Accounts  No

If this field is modified, recalculation is not required. The change affects the future interest calculations only.
If the frequency is changed in between two interest postings, interest should be recalculated with new frequency from the last posting date.

Note: Interest should be posted on the last day of the month for all the accounts.
 
9. Max amount per withdrawal Number None 0 - N Optional Yes All Open and New Accounts No Flat Amount of savings account.
This specifies the maximum amount that can be withdrawn from a savings account per day.
For a group/center savings account, this restriction applies to each withdrawal.
If left blank or “0”, then system does not assume any withdrawal limitations.   
10. Min balance required for interest rate calculation Number None 0 - N Optional Yes All Open and New Accounts No Interest is not calculated on accounts that have balance amounts below this number.
If left blank or “0”, then system does not assume any minimum balance required for interest. 
11. GL Code - deposits Drop Down None Acceptable GL Codes Mandatory Yes All Open and New Accounts No One GL Code each should be chosen from a list of acceptable GL Codes for deposits.  
12.  GL Code - interest Drop Down  None  Acceptable GL Codes  Mandatory  Yes  All Open and New Accounts No One GL Code each should be chosen from a list of acceptable GL Codes for interest. 

last modified 2007-11-26 02:47
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