Financial Services

Loan Lifecycle

Every loan moves through the same journey, from the moment a member applies to the moment it's fully paid. This page walks through each stage. To set up the loan products these loans are issued against, see Loans.

Applying

A member applies for a loan against one of your loan products. The application captures the amount, the term, and any guarantors or collateral backing it — all within the product's amount and term guardrails.

Approval

An application must be approved before any money moves. To protect your business, a different person than the applicant must approve the loan — this separation of duties means no single person can both request and release funds.

If the loan doesn't meet your criteria, it can be rejected instead.

Disbursement

Once approved, the loan is disbursed — the money goes to the member, by cash over the counter or by mobile money to their phone (MTN or Airtel). Because disbursement releases money, it is a four-eyes action: a staff member records the disbursement and a second owner or manager approves it under Approvals before the payout runs. Disbursing the loan generates the repayment schedule: the list of installments the member will pay, based on the product's interest method, rate, and frequency.

Repayments

The member repays according to the schedule, again by cash or mobile money. Cash/manual repayments are submitted for approval (a checker confirms them under Approvals); mobile-money repayments the member pays from their own phone post straight through. Each repayment is split in a fixed order across what's owed:

1. Penalty first
2. then interest
3. then principal

Repayments are applied to the oldest installment first, so the earliest amounts due are cleared before later ones. Every repayment posts to your ledger automatically.

When the last installment is cleared, the loan is fully paid.

Arrears

If an installment becomes overdue, the loan flips to "in arrears". A loan in arrears can accrue a penalty, according to how you set the product up. Tracking arrears helps you see which loans are falling behind so you can follow up.

Write-off

Sometimes a loan goes bad and can't be recovered. In that case you can write it off, which records that the loan won't be repaid and posts the matching entries to your books. Because it affects your ledger, a write-off is a four-eyes action — a staff member records it and a second owner or manager approves it under Approvals before the loss posts. A write-off is the last step for a loan that can't be collected, keeping your records honest about what's actually owed.

Last updated 2026-08-12