ERPNEXT for Micro Finance Companies

Loan Management covers loan operations like loan application, loan security pledging, loan disbursement etc.

Setting Up Loans

Loan Security Type defines the type of security that can be pledged against a loan like goods or land

A Loan Security is the actual security that is going to be pledged against a loan

Loan Security Price is the record in which you can log the loan's security price and validity

A Loan Type is where you can define various loan types and their properties like rate of interest, loan account details, etc.

Loan Application contains the applicant and loan security details for review

Loan Security Pledge contains the loan security and the quantity pledged against a loan

A Loan record is the loan account which contains all the information regarding a loan

Once a Loan is sanctioned, the loan amount is ready to be disbursed. For that a Loan disbursement entry is created

Loan Interest will be accrued monthly on the first day of every month for demand loans and one day before payment day for term loans

Loan Repayment entry is used to track repayments against loans

Loan Write Off entry is used to write off pending principal amount and close the loan

Once all the loan amount is paid, a Loan Security Unpledge is created for unpledging the securities

Process Loan Security Shortfall record is created on loan security price update and is also used for manual processing of Loan Security Price

Process Loan Interest Accrual record is created on every loan interest accrual cycle and is also used for manually processing loan interest accrual

If loan to security value ratio falls below a specific value, a Loan Security Shortfall is automatically created for that specific loan