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Loan management

SACCO loan management software

Loans are where a SACCO earns its income and takes its risk. SaccoMonitor handles the whole life of a loan — application, appraisal, approval, disbursement, repayment, arrears — with the accounting done for you.

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Loan products

Each loan product sets the terms applications start from:

SettingOptions
Amount and termMinimum and maximum amount; minimum and maximum number of instalments.
InterestRate per month or per year; flat, reducing balance or declining balance.
Repayment frequencyWeekly, fortnightly or monthly.
FeesProcessing fee (percentage or flat) and insurance fee, deducted at disbursement.
PenaltiesPenalty rate on overdue instalments and a grace period in days.
SecurityRequired guarantors (and how many) and whether collateral is required.
Savings limitMaximum loan as a multiple of the member’s savings and shares.
Custom questionsExtra fields on the application form (text, number, date, choice, yes/no).

From application to disbursement

  1. 1

    Application

    Captured by staff or submitted by the member. The repayment schedule, fees and net amount are shown before submitting.
  2. 2

    Appraisal

    The reviewer sees the member’s savings, existing loans, guarantors, collateral and answers.
  3. 3

    Approval levels

    Levels are set by amount and role — larger loans need more sign-offs. The officer who captured the loan cannot approve it, and nobody approves their own loan.
  4. 4

    Disbursement

    In cash, bank, mobile money or into savings, with fees deducted. The schedule and journal are created in the same step.

Repayments, arrears and penalties

Repayments are allocated oldest instalment first — penalty, interest, then principal — and overpayments go to savings. The arrears report ages overdue loans into buckets and shows portfolio at risk (PAR). Penalties are assessed nightly after the grace period, and members can be reminded by SMS before each due date.

Rescheduling and top-ups

When a member cannot keep up, the loan can be rescheduled: the unpaid balance (with overdue interest and penalties capitalised or waived) becomes a new schedule on new terms, previewed before saving. When a member in good standing needs more, a top-up loan pays off the running loan and pays out the rest. Both keep a before-and-after record. See loan rescheduling vs top-up.

The accounting behind each loan

EventJournal entry
DisbursementDr Loans receivable · Cr Cash/Bank/Savings (net) · Cr Loan fee income (fees)
RepaymentDr Cash/Bank/Savings · Cr Penalty income · Cr Interest income · Cr Loans receivable
Arrears capitalised on rescheduleDr Loans receivable · Cr Interest income · Cr Penalty income
Write-offDr Loan write-offs (expense) · Cr Loans receivable

More in double-entry accounting for SACCOs.

Frequently asked questions

It is software that records loan products, applications, approvals, disbursements, repayment schedules and repayments, tracks arrears and penalties, and posts the accounting for each step.

Each repayment is allocated to the oldest unpaid instalment first — penalty, then interest, then principal. Instalments show as paid, partly paid or overdue, and anything paid beyond the loan balance goes to the member’s savings.

Flat rate, reducing balance (equal instalments) and declining balance (equal principal), with weekly, fortnightly or monthly repayments. Rates can be quoted per month or per year.

Yes. A struggling loan can be rescheduled onto a new term, rate and frequency. Overdue interest and penalties are either added to the new balance or waived, paid instalments stay as history, and the change is recorded with a reason.

A top-up is a new, larger loan whose proceeds first pay off the member’s running loan; the member receives the difference. It goes through the normal approval process.

After the product’s grace period, a penalty (a percentage of the overdue instalment) is assessed once per overdue instalment. Penalties can be waived with a reason.

Related pages

Complete guide to SACCO loan management

From loan products to write-offs.

Loan rescheduling vs top-up

When to use each, and how they are booked.

Loan reports

Portfolio at risk, arrears ageing and disbursements.

Run your SACCO on clear, balanced books

Register your SACCO, import your members from Excel and post your first deposit the same day.

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