Loan Information System Essay

Custom Student Mr. Teacher ENG 1001-04 10 May 2016

Loan Information System

Background of the Study

The advent of computer technology has rescued mankind from the dark ages imposed by non-availability of technological know-how and requisite skills for undertaking tasks. Today, technological force can be applied almost in all facet of human endeavour to beat down complexities with relative ease and achieve maximum productivity even faster. According to Mbam (2002), the application of computers to the various feature of human undertaking has improved those professions by reducing the time needed to accomplish a given task and maximizing productivity. Hence, there is a need for a computerized system that is competent in order to harness and manage the operation of any cooperative society with similar features necessary. Nowadays, most of the establishments have become modernized and well-developed when it comes to dealing their business matters. They use technologies to make their transactions fast, easy, and accurate in order to avoid waste of time and for the sake of safety and security.

Furthermore, it also helps human to solve and understand complex problem and analysis such as people’s computational need especially to a business establishment or a corporation processing large amount of data and complex transactions. In addition, loan is one of the examples of a complex transaction because it is a critical business operation that deals with numerous accounts of different people and produce plenty and confidential files. It is also an arrangement wherein a lender lends money to a borrower and the borrower agrees to repay the money, usually along with interest at some future point in time. In Nigeria, a loan management system is being designed to automate the back office activities of financial institutions offering different types of loan. Their staffs will define the product types in customizing for loans according to its individual requirements and also assigns each product type to a product category and condition group.

Its inherent risks, inconsistencies and errors associated with manual financial transactions and computations demands the use of automated system for simplicity of operation, accuracy and proven results (Igboji & Mbam, 2002). According to Ocay (2014), in Quezon City Polytechnic University Multi-Purpose Cooperative (QCPU-MPC), a group of researchers have developed a loan servicing and management system with kiosk and payment reminder via SMS alert that will be managing online by the admin and can be accessed by their members on the internet or on the kiosk near the office of the cooperative in order to know the current status of their loans. In Iligan City, Student Members Cooperative, the host company of this study was also facing some problems with regards to their loan services due to lack of plan on how they will organize the information they have related to the offered loan service.

This experience will be eradicated if they use computer system which could facilitate any transaction at a faster rate. Since that is the only predicament they have then the researchers should try to create a better way to ease the processing of every member’s transaction and queries. Having a computerized loan system in a cooperative like SMC will not only provide accurate calculations and fast process of loan transactions but it will also secure data through security implementation and arranged files provided by a well-planned and designed database that will produce a paperless environment. With this, the researchers are challenged to conduct a study not only to test its ability in making a system but also to attend to the need of the said cooperative of loan information system.

Statement of the Problem

This study seeks to satisfy and find the possible answer to the following concern, namely:

1. There is erroneous posting of amounts.
Listing of each loan accounts is sometimes incorrect due to the committed error done by the loan in-charge like omission of values and transposition of amounts. For example, the loan amount should be 1,000 but it is posted by the loan in-charge as 100 or the amount to be posted should be 67,798 but it is erroneously posted as 67,789.

2. There is poor record keeping.
This problem is being encountered by the loan in-charge because of misplaced or lost application form of the borrower.

3. There is inaccuracy in amounts because of erroneous posting.
Inaccurate amount is the effect of having wrong posting by SMC for the purpose of not updating the loan account immediately every time payments are made by the borrower.

4. There is time constraint in producing reports because of inconsistent data update. Hassle is present due to lack of data update by reason of not having a system that stores loan information of the borrowers and makes a time constraint in generating reports.

Objectives of the Study

The study generally aims to make a loan information system that could update loan status, reports and documents for the benefit of the users. Moreover, the study also aims to:

1. Make a simple and user-friendly system with security measures. A simple and user-friendly system will make the loan process and its update an easy one especially when that system also secures the data found in there.

2. Provide consistent record by immediate encoding of the applicant’s information. It will be easy to encode applicants information and the consistency of data will not be a problem anymore as long as the provided systems is done accurately and properly because every time there is a newly approved loan application then it will just be typed in the database wherein it is belong in a field name in which the data type is also programmed.

3. Update borrower’s account immediately every time payments are made. With the proposed loan information system it will be not hard to update borrower’s account because you just have to encode it and then it will update by itself due to the reason that it is programmed already.

4. Provide real time documents and reports.
It will help you to have an easy access with regards to the updating and generating of reports because of the loan information system that have existed and it will resolve the problem about time constraint. Real time documents and reports will be in a weekly basis.

Significance of the Study

The result of this study will be of significant value to every user who will use the system. This will extend to the benefit of the users that would meet their needs like the necessary reports and documents for the future decision-making and to ease the monitoring accounts which could minimize future errors and save time.

The result of this study would be useful to the following to wit:

SMC Dep’t Head. It can provide them necessary reports and documents that will be used for future decision-making.
SMC Accountant. It will help them monitor accounts that will be used for making financial statements.
SMC Personnel. It will be less hassle for them to post and to update loan accounts of the borrower.
Future Researchers. It will serve them as a guide and reference for future researchers related to this study.

Scope and Limitation
The study will focus on producing a loan information system of SMC. It will include the following: First, data-entry point of facts. Second, a loan application that will provide is a consistent record of the applicant’s information. Third, it can monitor accounts of the borrowers. Lastly, it includes monitoring of reports which produces financial reports such as statements of accounts of borrowers, schedule of loans and aging of accounts receivable. Furthermore, this study is limited to the loan transactions only of SMC. It does not cover other accounting transactions of the cooperative.


The first step to be done is to create the database by a brainstorming session. The developer needs to know exactly what the new system objective. During this session the image of all tables and relationships between them will be presented while the developers will continue to verify the information provided by asking questions such as: “A borrower may have many loans but is it always true that a loan can never be shared amongst multiple borrowers?” It is often in some cases that there is some of the information that needs to be corrected as disclosure founded incorrectly. When the database or the information is completed, the first draft will be created and released. This draft may contain many common elements such as user name, password, log-in screen, unchanged data maintenance forms and mail-merge facilities.

These are created from the ready-made code modules from the code library. Everything does not need to be created from scratch. The application framework or the first released draft is usually delivered at the following working day. Every day or most of the days upon which work takes place thereafter, another draft will be released, free from all known bugs and will be forwarded to the client for testing with release notes enclosing all the details containing all new features added from the first released draft. The client will then test the second draft with provided such as “we need a field for date of birth on customer records, or there’s a bug when I add a new loan profile of a borrower….”

This feedback is then will be used for the improvement of the next draft. When all features are implemented, a freeze is declared to any more new features and then the third draft will be released. From this point upon forwarding the application, comprehensive testing will be applied and if there are any bugs found, it will be fixed automatically. When the client is confident that no more bugs remain, the application is declared absolutely complete and is released as version 1.0. If required, documentation and training materials can be written at any time after the final product test.

Free Loan Information System Essay Sample


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  • University/College: University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Date: 10 May 2016

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