WEB BASED LOAN COLLATERAL-SECURITY MANAGEMENT SYSTEM FOR MICROFINANCE BANKS

ABSTRACT

Microfinance Banks are developmental tool that focuses or centers on the extension of credit to the rural or low income earners. In recent time, most people with questionable characters had penetrated the Microfinance sector and deceive them by accessing credit facilities with false collaterals or items already used to access credits from other financial institutions. This has caused collision of various Microfinance Banks into a particular security item on default of such customers. At times such customers may die without liquidating the loan and when each of the Microfinance Banks goes for litigation will discover that some other people also had such object as collateral items. This study is therefore focused at Designing and Implementing a Web Based Loan Security Management System, which will assist Microfinance Banks to identify any object that is already in the loan security database and avoid having one security item for more than one loan. The system is designed based on a three tier architecture running on Microsoft windows operating system. The method employed is Structural System Analysis and Design, PHP was used for the interface and the database on MYSQL DBMS environments. The System is capable of accepting information on loan security items but will reject any object already in the database intended to be used as a security for a new loan while the amount previously tagged to it had not been liquidated. On implementation of the system, the National Association of Microfinance Banks- Imo State chapter will have improved decision regarding Securities before loans are disbursed, thereby creating quality loans which will reduce recovery cost and high rate of Portfolio At Risk.

Keywords: Microfinance, Loan security, Web based management system, Credit risk management, Portfolio at Risk