CHAPTER ONE
INTRODUCTION
- Introduction
This chapter presents the introduction to cooperative society loan information system, background of the study, statement of the problem, aim and objectives of the study, significance of the study, scope of the study, organization of the research and definition of terms.
A cooperative society loan information system is an automated system that facilitates storage and processing of loan information of registered members of the cooperative society. Cooperative societies occupy a significant place in the cooperative movement. Their importance is seen in their ability to meet the much needed cheap institutional loan needs of members.
A loan is an amount of money given to an individual or institution on the condition that it will be paid back over a given period with interest, which serves as payment for the use of money. For effective management of loan information in a cooperative society, an automated loan information management system becomes very necessary. The business objective of providing efficient loan process using technology is an enabler in order to give the cooperative society a competitive advantage and enable them keep proper record of loan information and operate professionally. There is therefore the need to automate the manual loan processing procedure as much as possible.
The loan-granting process follows adequate methodological guidelines as a set of mechanisms and procedures to which relevant credit documentation is being subject. Formalization of the loan-granting process improves efficiency in gathering and processing of credit documentation, but also facilitates the process of evaluation of the gathered data with a view to efficient making of credit decisions. In addition, the documentation flow is burdened with specific check points within which the data relevant for the loan approval are filtered. The assessment of credit-worthiness includes identification of financial capacity of a future debtor as a source of depreciation of approved loan. For effective management of cooperative loans, there is the need for a computerized system to aid in processing of loan requests and determination of interest payable.
1.1 Background of the Study
Akwa Ibom state multi-purpose staff cooperative society is a body registered with government to bring solutions ranging from financial to house hold needs of members. The present chairman of the cooperative is Dr. Lionel Ukoka. It is mostly for workers in Akwa Ibom State Polytechnic. Services provided by Polycop include giving of loans to members, buying of goods in bulk and sold to members in at reduced costs, savings and thrift. For loans given to members, repayment is through deductions from monthly salary and cash repayments. It is for both teaching and non-teaching staff.
In the existing system, there is no automated system to enable them to manage loan information of members. The manual system of managing loan information is not effective. Loan information is manually recorded and there are usually errors in the computation of loan interest. Accumulation of paper files is another challenge in the existing system of managing loan information. To overcome these challenges, there is need for the implementation of automated system by cooperative societies to manage loan information properly.