Background of Study
Saving is a process of setting aside portion of current income for future use rather than spending it immediately, or the amount that is left after spending your income. To measure your savings, you need first to estimate your income and subtract your current expenditures, the difference will be your saving. But in banking Savings differ from saving. Savings refers to savings accounts, which is short-term, interest-bearing deposits with bank or other financial institution. According to Karlan, D., Ratan, A. L., & Zinman, J. (2014), savings is one of the reason of smooth consumption and finance productive investment of households’, human and business capital.
Loan is the lending of money from individual or organization to another individual or organization. During loan, the borrower initially borrows a specific amount of money which is called the principal, where he or she is obligated to pay back or repay an equal amount to the lender in concerted time and date. A rate of interest, which serves as financial compensation is applied. Loan is commonly used by some organizations or individual, but usually in rural area with average salary citizen who are deprived of accessing into conventional financial services because they are poor and they cannot offer collateral. (Samer, S., Majid, I., Rizal, S., Muhamad, M. R., ; Rashid, N. 2015)
Savings and loan is a process of saving and loaning at the same time, where you can save your money at the bank or financial institution and you can also loan whenever you need a money, Savings and Loan programmes have been one of the common solution of desperate people of poor communities with financial problem, but savings and loan programmes cannot solve all of the problems that the poor face. However, the organization around savings and loans can be an important beginning in helping communities deal with both structural issues and other problems and little by little, gain financial confidence, knowledge and experience.
The Levitical Savings and Loan Program (LSLP) is located at Upper Sto. Niño Brgy. Sta. Cruz, Antipolo City. Levitical is derived from the biblical principle Levites, a member of the priestly Hebrew tribe of Levi. It is established due to the desire to help the needy in the community especially the members of the church Grace from Heaven Church. LSLP has 18 employees. These employees are the assistants, shareholders, investors, department heads, administrators. Pastor Randy Intano together with the church leaders came up with the idea of savings and loans program as a suitable solution. Pastor Randy Intano was appointed as the president and founder of LSLP. At this point the institution is rapidly growing, from less than 10 members now they have 154 members that includes 56 established church members and more than a hundred non-members.
The problem in the company is that the company still use manual record keeping, this type of record keeping takes a lot of time and a lot of resources Imagine an applicant requests a membership and an employee will have to take all the needed forms and paperwork to be filled up by the applicant and takes a couple of hours to be processed by other company department. Another problem that manual record keeping can produce. Procedures will also not be followed at times which can and will affect the flow of the workplace. This can also lead important paperwork to be misplaced. Also due to this, efficiency of work is also a problem. It can cause delays in some areas and can also lead to more problems. Real-time updates are also a thing to be worried about on manual record keeping. Since paperworks are set aside and stored to a cabinet somewhere in the company, there will be times that some of those paperworks won’t be attended in time and updates won’t be done at the right time especially when a lot of members are involved in the company. Sometimes, updates only happened when a member visits the company to check their account and just then the computations will happen.
Using an automated system, these problems will be easier to deal with since the records will be kept in a database that will have a backup which will make paperworks less needed like before. The requests and application forms will now be clicks away and can now be accessed by other company department on their accounts and be processed faster. With a systematic and accurate system, the procedure can now be error-free with the help of pre-coded procedures that the system will be following. The crucial computations of the transactions will be more accurate since formulas will be automatically used by the system when a condition is set. The system will always keep records on a database and these records will be having multiple backups. Efficiency and flow will also be boosted since the work will be done by the system with the help of the procedures that were set by the admin or developers. The updates will also be done by the system on real-time and computations will be done by the system on time without delay and the searching of files will be clicks away using the keyboard.
Figure 1.1 Conceptual Model
Statement of the Objectives
The objective of this study is to design, develop and test a savings and loan management system that will improve the process of the company by providing an automated, systematic and accurate management cycle that is error-free, efficient and updated real-time.
It aimed to achieve the following objectives:
To design a system that will be innovative to the company in the aspect of having a better and faster way of keeping records, help in decision making, and solve different problems like long processing time, using paper works, manual processing inconsistency.
To develop a user-friendly, systematic, consistent and efficient web-based system that includes the following features: Email notification, Weekly Announcements, Auto report sending of Deposit, Automated loans/fines/penalty calculation, Search and Credit rating, together with: Company Webpage, Online Registration, Applicant homepage, Registered member homepage, Finance department homepage and Administration homepage.
To test a necessity if the system together with the satisfaction of the user if the system is appropriate and applicable to their position with the use of Software Usability Measurement Inventory (SUMI).
Significance of the Study
The planning and production of this study will benefit many individual, each and in many different ways.
Company. The main beneficiary of the research since this will give the company the edge of having a more modern work and having a computerized system will help the company grow larger and gain more members, employee, investors, less expenses and eventually gain more profit.
Developers. They will benefit by them gaining a source of income and at the same time will be able to hone and improve their skills as developers and as well as their communication and the developer’s capability of working with other people.
Employees. This study be beneficial to the employees since being able to upgrade their workplace from working with paperwork to being able to work with a system that makes most of their work easier which will help them be more focus on a certain work.
Members. The study will benefit the members in a way that some things will be easier to do like access their accounts and properly check their balance online. They can also check for payment dates and they will be able to talk to the employees without personally going to the company. They will also be able to send requests in both savings and loans easier that the admins will process.
Applicants. The beneficiary that will benefit by them being able to apply online without leaving the comfort of their homes. They will be able to view detailed videos, pictures and other information online that will be used as a media for applicants in the replacement of seminars.
Scope and Limitations of the Study
The scope of this study deals its objectives and the problems of the company, that includes several main features:
Company Website – This will benefit the applicant who wants to be a member of the cooperative. This will provide an orientation for applicant, regarding the agreement including the rules and regulations. Announcement are also included and instruction regarding with the registration. After registration, the applicant can now login to the system which means they can now create their profile that requires; personal data, family background and their beneficiaries. They can also review the presentation of orientation before taking the survey. The survey will serve as a way of determining the applicant understanding about the agreement including the rules and regulations.
Membership Approval – Applicant account is just a pre-membership account, they can only access their profile, announcements, and the presentations. The survey results and the profile information will sent to the Admin and HR Department for membership approval. Once the membership registration was approved the applicant will receive an email notification from the system and also on his/her account. The information of the disapproved applicant will be save to the archive and it will be used for their future references.
Registered Member Profile – Once the Applicant is approved they can still view the announcements and update their profile, review presentations and view the result. Upon logging in they can view and apply for the Share:
100 per share no par value;
Shares earned 2% accumulated interest, added to the principal amount
The member must set a non-withdrawable period of months for their shares and savings. Otherwise it will not earn interest upon its premature withdrawal for any reason whatsoever.
Withdrawal of investment share without interest may be done upon notification to LSLP Committee for a period of 2-3 months prior to withdrawal.
Upon maturity of investment share, investor or shareholder may decide to withdraw the whole amount or to re-invest for another period to earn much higher interest rate on surplus income, with renewal of contact.
They can also start the savings:
100 pesos per head
With 2% interest monthly
10 pesos penalty for delayed payment
5 weeks inconsistency on savings leads to dismissal
End of saving period is 2nd week of December
If they have existing saving balance they can already apply for loan:
5% interest loan in 1 month, you can avail is twice the total amount of your savings and share capital, interest is deductible from the principal amount of the loan.
Exceeding loan will gain 10% interest, with Co-maker and collateral.
Loan payment can be made weekly, 15th day of the moth or Monthly. With 5 days grace period a month, for compliance 1% penalty is charged.
End of loan until Nov. 15, and end of accumulation of interest on Nov. 30.
Finance Dept. Home Page – It consist of all the savings, loan, withdrawal interest transactions. Including the payment for penalty. The dividend for individual member that came from the 2% of 5% interest of all their loans. And the 3% will be separated for the:
Tithes – 10%
Committee – 40%
K-Sap – 20%
Reserve – 15%
Mission – 5%
Benefits – 5%
Penalties or fines will gave back to them at the end of the year as giveaway.
Admin Home Page – Feature that cannot be forgotten, Admin home page or account. Admin has the control of all the account of the webpage except the data or profile of the member and employee. He can approve or Disapprove any request and can be the one who can approve or disapprove an applicant. He can add new account, delete account and view any account information. He will be responsible in Announcements.
Savings Manager – This feature will help the member and the employee to track the members saving status, if its good, bad, or if it is paid or not.
Loan Manager – This feature will also help the member and employee to easily request a loan, and to know if it is approved or not, It has also financial reports.
Loan Calculator – It will help the member to identify the exact loans that they will receive and exact amount they must pay in concerted weeks or months. It will also calculate the interest rate.
Withdraw Manager – Includes the Approval, and financial reports of withdraws.
Credit Rating – This feature will help the admin to decide how and who will they be going to approve or not. This feature will rate the member status if it Is good in giving and with clean records.
The limitation of the study starts with the system not being able to accept the passing of requirements online. They need to meet face to face and give the requirements to the Cooperative. The system can’t also accept online payments like banking and prepaid cards like paymaya, coins.ph and others.
The system won’t also have a mobile-based app meaning members will have to access the system’s website through the browser and the company’s website link.
The system will also require the use of internet for members to access their accounts.
Member limitations starts with the user not being able to access the company’s data, the member can only access his data and send requests to the admin.
The members won’t also be able to deposit and withdraw money online since it is still lacking banking support, they need to meet face to face if they want all the records to be updated.
Services will applicable to all who is near to them, which means every all members must be able to attend weekly meeting face to face. Transactions like savings deposit and loan payment must be happen in personal meeting.
The system requirements must be Windows 10 from Windows 7 with Firefox, and Google Chrome browser and it still available In Mac OS with Safari browser.
Definition of Terms
Applicant. A person who aims to apply or make a formal application for something in
this case a membership for the company.
Borrower. A person or a group of people that has the intention of taking something that
belongs to someone else and having the intention of returning it.
Charges. An amount of money asked for a transaction inspired either by the law of the
company or agreed upon.
Deposit. The act of putting money in an account in a bank.
Indigent. A person that is in need.
Investment. Something (money) that is given to someone by an investor that is hoped
to be exchanged with something that has more in value in the future.
Investor. A person or a group of people that puts an amount of money into something
(company/firm) with the hope of achieving profit in the future.
Levitical Savings and Loans Program (LSLP). A starting company based on Antipolo
that is the center and host company of this research.
Loan. Something that is borrowed and is expected to be paid back with an interest
added. Money in particular.
Member. A person or a group of people that is involved in an organization or a social
Membership. A term used to define a state of being a member in an organization or asocial group.
Passbook. A paper used to record the transactions done in the history of being a
member in the firm/company.
Principal. Specific amount of borrowed money.
Process. A series of step by step action to achieve a specific end.
Savings. A money that is saved through a bank or other ways of saving up money.
Shareholders. A person or a group of people that owns a share in the company.
System. A set of connected things that create a complex material or machinery.
Technology. A machinery or equipment that is developed for scientific purposes and to
make it easier for people to do specific tasks.
Withdrawal. The act of taking money out from an account.
REVIEW OF RELATED LITERATURE
This chapter outlines the primary concepts the study is concerned particularly the relevant keywords, technology used and the approaches other researchers in the same field employed to accomplish a similar goal.
Impacts of Rural Savings and Credits Cooperative Societies (SACCOS’)
According to Magali (2013), 73% of 431 borrowers of rural SACCOS are realizing the improvement of their livelihood on education and health, physical assets, crop yields and business capital. This study also shows that the high impact after taking loans is up to 50% to 200% and the study noted that the high impacts of loans and low default rate for borrowers were positively related.
This study recommends the following: the borrowers should use loans according to the rules and conditions of SOCCOS to prevent more penalties and to feel the real impact of savings and loans, avoid multiple loans, and the SOCCOS should do their part also by keep in processing and follow up of overdue loans.
Loan Management System and Methods
Devon C., Barbara G., Eugene P., Mikalai V., Peter B., Leslie S., Christoper W., (2014), invented the loan and loan lead management system. The loan and loan lead management system features software and hardware that permit loan applications to be received, Submitted, processed, and analyzed in an automated electronic process while also generating leads based on loan applicants whose loan applications are rejected or withdrawn that may be sold to other lenders. Another module of the system’s Software permits loan applicant information to be cross-checked against databases containing details concerning defaulted borrowers to enhance the ability of lenders to engage in collection efforts against debtors. The system may also be installed at a retail location to
provider store-level loan application Submission and processing that can generate resalable leads that can be transmitted by a system administrator to lead purchasers. The software can be installed on a server and accessed remotely via a plurality of computers communicatively linked to the server by a telecommunications network. Accordingly, the invention features a loan management system that can include a server having at least one database stored thereon, a computer that is located remotely from the server, a telecommunications network that communicatively connects the server and the computer, and loan management software installed on at least one of the server and the computer.
The Changing Environment of Banks
According to Jeucken and Bouma (2013), this paper examines the development of environmental concern in banks, their environmental impact, their role in the economy and the driving forces for more proactive policies toward sustainable development. A typology is presented categorizing four stages of attitudes toward environmental problems: defensive, preventative, offensive and sustainable banking. The paper illustrates that governmental policy is an important factor in designing the context that shapes some, but not all, of the actions taken by the banking sector. An overview of the match between Dutch environmental policy and the role of the banking sector is presented. Finally, some conclusions are drawn with regard to the possible future role of banks towards sustainability.
Relative Efficiency of Rural Saving and Credit Cooperatives: An Application of Data Envelopment Analysis
According to Tesfamariam, Hailemichael Tesfay and Aregawi Tesfay (2013), the performance of rural financial cooperatives in the mobilization of savings and provision of credit has been inadequate. Therefore, greater degrees of efficiency among rural SACCOs would result in greater access to finance, higher profitability and increased financial services to rural people. In this study we apply the Data Envelopment Analysis (DEA) method to evaluate the relative efficiency of SACCOs in Tigrai region of Ethiopia. Data were collected from 329 rural SACCOs during the year 2012.
Online System for Fulfilling Loan Applications from Loan Originators
According to Limin, Babak and Ting-Hu (2013), the World Wide Web has evolved from first generation web systems that simply provide information to second generation system using application services that provides dynamic, personalized information and powerful back-end transaction processing.
That’s why they develop an on-line interface system for facilitating the processing of loan applications by loan originators. A processing and Submission system receives relevant loan information from a borrower and enters this information into file templates, which are utilized during loan origination. An automatic data flow process accessible through an origination screen populates the relevant fields in all of the other loan forms and word processing documents. Forms are Supported for several different loan types, such as conventional mortgages, federal housing authority loans, veteran’s administration loans, and other similar types of personal and business loans. The automatic data flow eliminates the need to re-enter the same information in each form, and it also automatically calculates relevant field data, such as percentage rate, maximum loan, cash to or from borrower, amortization schedules, and the like. Once information is entered into each data field, e.g., borrower’s name and address, of the file template during the loan origination process, the information is saved in a database wherein each data field is associated with the particular information entered. Thereafter, when a particular loan form is activated, the automatic data flow program conducts a search for each data field. Alternatively, each loan form can be modified to insert embedded codes, so that the computer program can more easily identify the location of a data field and enter the associated information. In one embodiment, the loan broker computer system includes a loan origination Software program integrated with a web-browser based interface system. The interface system couples the loan origination Software program to one or more partner computers. The partners comprise loan underwriters, lenders (such as banks and finance companies), and settlement service vendors (such as appraisers, insurance brokers, and credit agencies). The interface system provides dynamic formatting and data transmission for different connections depending on the transaction type and target partner. In a web-based implementation, the interface system populates data directly from the loan origination Software program to the appropriate web pages of the target partners.
This chapter contains the description of the research design, describes where the data come from, instruments used in the data collection and the tools that are being used for the development.
This study used a developmental research in order to develop the effectiveness of loans and management system for Levitical Savings and Loans Program. Developmental research involves a situation in which the development phases performed identification of problem, conducting analysis, planning, designing, and implementation.
Moreover, as composed to instructional development, developmental research has been defined as a systematic study of designing, developing, and evaluating instructional programs, processes, and products that must meet criteria of internal consistency and effectiveness.
Figure 3.1 Extreme Programming Model
Extreme programming (XP) is a popular Agile methodology of software development that aims to produce higher quality software, and higher quality of life for the development team. XP is the most specific of the agile frameworks regarding appropriate engineering practices for software development formulated by Kent Beck in March 6, 1996. It is suitable for a small team’s workforce (5 to 15 team members). Maximizing communication which leads to enhancing team-work. Advantage of using this method is open workspace, customer is involved in the development team which helps to provide good feedback during the development.
Planning. This is the first phase of the Extreme Programming development life cycle. Its main task is to set goals of the entire project and certain iterative cycles. At this stage the team meets with the customer and asks him on all aspects of the future software. The developers need to know if Who will use the system? How will they use the system? What should be input into the system? And What should be output by the system? Are the users capable of using the system?
The developers conducted an interview and observation to gather the necessary information that will help in the development of the Loans and Savings Management System for Levitical Loans and Savings Program. The data that has been gathered during the interview and observation helped the developers in creating the story cards.
During this phase the developers also formulated the Gantt chart that will guide the developers during the development process.
Story Cards / Task Cards. This is one of the primary artifacts in XP which contains just enough information to guide the developers implement a desired task systematically.
During this phase, the developers created the story cards based from the information gathered during the planning phase.
Designing. This phase focused on designing the software design and user interface which helps in defining overall system architecture. At this stage of the project the developers must define the main features of the future code. The main thing is to create a simple design because simplicity is one of the main principles of XP methodology. Extreme Programming developers often share responsibilities at the stage of designing. Each developer is responsible for the design of a certain part of the future code.
At this stage the developers designed the following:
The step by step action and representation of the relationship and interactions between the users and systems was designed using the Use Case Diagram.
The processes and visual representations of the data that moves through the organization was designed using the Data Flow Diagram(DFD).
The user interface(UI) of the system was designed using the wireframes.
The tools that has been used by the developers and designs can be found at the development tools section.
Coding. Extreme Programming developers believe that a good code must be simple. That is why they refactor it constantly. The procedure of refactoring allows them to simplify the code or its parts without affecting the functionality of the final product.
Pair Programming. According to Ahsan Rahim (2014). In XP, programmers work in pairs, sitting together to develop the code. This helps develop the common ownership of code and spreads knowledge across the team. It serves as an informal review process as each line of code is looked at by more than 1 person. It encourages refactoring as the whole team can benefit from this.
Testing. In Extreme Programming the procedure of testing is usually conducted not after the final or intermediate product is done, but along with the procedure of code writing.
Acceptance Test. At the final stage of the life cycle the XP team must get a feedback from the customer. He is the only person who estimates the final and intermediate products whether or not the system meets its requirements.
Product Increment The increment is a step toward a vision or a goal. The increment must be useable condition regardless of whether the system meets its requirements.
Sources of Data
The developers conducted an interview with the company’s president and some of the information that has been gathered were the company profile, the problems they are encountering regarding with their current system, sample forms that are being used in the transactions like depositing, membership application, loan application, withdrawal application, receipts, orientation certificate, passbook, and their desired system to address the problem.
The library and some of the search engines in the internet were used like google scholar for the extra information.
Instrumentation and Data Collection
The developers gathered the information using the interview guide and observation with the company. After finalizing the information that has been gathered, the developers found out that Levitical Savings and Loans Program in Upper Sto. Niño Brgy. Sta. Cruz, Antipolo City is in need of Loans and Savings Management System so that the company will be able to store records, generate reports, secure all the stored records and find it easily. The developers also conducted some research to collect additional information regarding the project study.
The tools will be using to represent the data and the processes of the study are the following:
Use Case Diagram. The step by step action and representation of the relationship and interactions between the users and systems.
Figure 3.2 Use Case Diagram
Data Flow Diagram. The processes and visual representations of the data that moves through the organization.
Figure 3.3 Context Diagram
Figure 3.4 Level 0 Diagram
Wireframes. Wireframe is a visual guide that represents the skeletal framework of a system which is also known as the screen blueprint.
Figure 3.5.1 Homepage
Figure 3.5.2 Create Profile
Figure 3.5.3 Orientation
Figure 3.5.4 Assessment
Figure 3.5.5 Withdraw Application
Figure 3.5.6 Loan Calculator
Figure 3.5.7 Calculation Result
Figure 3.5.8 Loan Request Message
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, 2(1), 16-25.APPENDICES
Share and Investment Agreement Form
Loan Application Form
Passbook Front Page
Passbook Savings Record
Passbook Loans Record
Yearly Member Reports