Information systems are integrated pieces of software that are used to manage personnel, production, finance, materials and marketing. Automation and merging of loan application and loan management information systems will significantly improve all sectors of the company. A loan management information system will migrates the company’s documentation to the digital platform for better information management unlike the conventional paper based management of the company resources. A tailor made information system will ensure that the needs of the business are well gathered and as a result lead to improved service delivery. Loan allocation and management will be managed as a single entity since both services depend on each other.
The loan management system shows two sections; loan application system and loan management system. The two systems are integrated to work together. Loan application systems illustrate the processes of loan application. This involves filling of loan application forms and submission to the credit officer. Once received, the applicant details are merged with credit bureaus to determine loan eligibility basing on credit reports. Once a client has been cleared of any loan defaults the application is approved by credit officers and forwarded to management.
Once the management approves the loan application status, the client is informed of the status, the repayment period, interest and terms and conditions of the loan provider. Afterwards, the loan is dispersed to the applicant account. A grace period is calculated and the applicant informed accordingly. During these processes, the information is relayed to the loan management system and all the data stored in databases.
Once the grace period is over, the loan management system takes over the processes of recovery and monitoring. The system records payment frequency and amount to ascertain accuracy. If none of the factors is satisfied, the system prompts the credit managers who in turn liaise with the managers to contact the client about the default. A report is generated and conveyed to the credit bureau agencies for future referencing. After three consecutive months of default, the system computes the loan and interest applicable and supplies the report to credit managers who in turn seek the defaulters. If not reachable, the guarantors are sought and informed of full responsibility. Liaising with local authorities, the guarantors and defaulters are sued in law of courts if no settlement mechanism is arrived at. Legal experts are utilized to oversee the recovery of loan amount and accruing interests.
A flow diagram of the above process is as shown below
The entities are the lender, loan applicant, credit bureau and local authorities. In case a client repays the loan in the stipulated time, a report is issued to credit bureaus for statistical and assessment purposes. The two systems are merged to form a single functional system capable of tracking loan applicants, storing their information and retrieving it to the necessary partners. The new system is more functional and efficient than the individual systems because it tracks processes and store data at the same time. The data is analyzed and used for decision making purposes in future.
Information management systems are essential components for data analysis, managerial and decision making purposes in an organization.
References
Gabor Magyar, G. K. (2007). Advances in Information Systems Development:New Methods and Practice for the Networked Society, Volume 1. Springer.
Song, W. W. (2011). Information systems development. Springer.
