CAGAYAN STATE UNIVERSITY AT LAL-LO 1

CSULFEA LOAN MANAGEMENT SYSTEM

A Capstone Project Proposal

Presented to the Faculty of the

College of Information and Computing Sciences

Cagayan State University

Lal-lo Campus

In Partial Fulfillment for the

Academic Requirement

for the degree

Bachelor of Science in Information Technology

By:

Mateo, Neilheart Starh

Agcaoili, Monica

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Calucag, Adrian

Cuadro, Lovely Ann

Newland, Arjay

June 2021

Chapter 1

INTRODUCTION

The Problem and Its Background

Related Literatures and Studies

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Related Literatures and Studies

This chapter contains the review of related literature and studies that are gathered from the
internet , and other references which are relevant to present studies: this section also consist of
the synthesis of the art, gap bridged by the study, theoretical paradigm, conceptual framework
and definition of terms.

The literature review ofthis project covers previously researched material from different scholars
on loan security and management. Through researchers’ attempts, various theories on how loan
management has been; propagated. These theories produce systems to assist managers in loan
management, managing information systems in Microfinance institutions, existing information
reporting systems, improving management, reporting and the use of data warehousing efficiently
to improve management reporting.

On the basis of extensive literature survey related to loan management system has been taken
into consideration in this section.

Jay Chaudhari et. al. 2021, In the daily transmuting scenarios of the financial world, lenders and
students are searching for new, modern and digital techniques to manage their loans through an
automated management system that can ease their effort. The need of this system is to make the
process flexible, scalable, agile and fast while being more affordable and reliable. Student Micro
Loan Management System is an application which will provide users information with different
types of loan available for students. This application gains the headway of an understudy and
moneylender simple in giving the confirmed data about student micro loan. This project provides
the information about various details of Student micro (Tuition and facilities) loans which are
allocated for students. This task accumulates all the data of the advances. This project provides
the information about various details of education loans and makes it available to users in user-
friendly website/app.

Hao Wang, et. al., 2019, Current financial loan management systems are usually deployed in a
singleservice mode, also the transactions are not transparentand traceable to most of the roles
participating in theprocess. Their data privacy protection mechanisms are not robust enough

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facing various cyber-attacks. Toovercome these challenges, we propose loan onblockchain

(LoC), a novel financial loan managementsystem based on smart contracts over
permissionedblockchain Hyperledger Fabric. We use the Chinesepoverty alleviation loan as the
case study. We designa digital account model for the transfer of assetsbetween centralized and
decentralized ledgers; andpropose locking and unlocking algorithms for smartcontracts. We
introduce digital signature and oracle toprotect the data privacy. Performance evaluations
onchaincode and unlocking codes show that our systemis applicable in the real financial loan
setting.

Akhil Sahota et. al. 2018, Today’s market is progressing with a great pace. The people are
lacking the time to accomplish all their tasks. The technology that saves time is always
appreciated whether it an automated machine in a factory or a bank providing a loan to its
customers. Most of the times, banks deal with a delay in the process due to inappropriate loan
processing system. This in some cases leads in the loss of their prospective customers. A suitable
loan management system allows the bank to provide their customers with quick loan approvals,
while at the same instance, the banks are allowed to disburse the loan amount in a fast pace
which further results in happy and satisfied customers. The key aspects of the loan management
system include reduced processing time and turnaround, ability to improve the performance
throughout and inquire in a much lesser time, tracking of status online and better document
management, minimization of errors, details required and unwanted information requirements
and better customer satisfaction with new product offerings and thus, impacting the minds of the
customers. The financial sector is growing and grooming as each day passes and thus,
introducing efficient new technologies in this sector will surely result in development of agencies
and customers. With appropriate steps and efficient technologies, the customers and the agencies
can bond together, and the financial sector can gain more foothold.

Julian VASILEV et. al., 2017, A loan management information system (for transaction
processing in credit institutions) records data for given loans, returned sums for principal,
interest and taxes. The purpose of this article is to accept or reject our assumption that the more
loans are given, the more sums are returned by customers. The main methodology used is time

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series analysis. Data are analyzed in SPSS. The main proved conclusion is that incoming money
flows in credit institutions do not depend on the amount of given loans. This article is published
for the first time. This article gives notes for extending existing loan management information
systems for loan management in credit institutions and banks in the direction of business
analysis.

S. M. AKTERUJJAMAN, et. Al., 2016, SMEs all over the world have been playing a crucial
role in promoting economic development as well as industrial production. SME financing has
been identified as a major obstacle to SME growth. Unfortunately, the issue seems to be as
unresolved as it always has been. Though the majority of the issues are with the SME
themselves, the banks also have major issues in designing financial products for the SMEs. This
study tries to find out the underlying problems from the bank’s perspective. The major findings
are related to the high interest and loan duration rates, reasons for SMEs relatively informal way
of doing business in contrast to bank’s formal procedures and prerequisites, bank’s relative
inexperience in this field. They are also related to the bank’s lack of perspective, the viability and
benefits of cluster unity, approach to informal loan takers and non-usage of modern technology
and accounting procedures. The recommendations were provided based on the analysis and
findings.

Financial System :The financial system refers to a set of complex and interconnected
components that aims to regulate the flow of money in an economy through the use of financial
institutions, financial markets, financial instruments, and financial services (Das, 2018).
According to (Agarwal, 2017), the five parts of the financial system are 1. Money – the medium
to buy services and goods. 2. Financial Instruments – are formal obligations that require a party
to receive payments, examples include bonds, loans, and stocks. 3. Financial Markets – a place
where financial instruments can be sold. 4. Financial Institutions – firms that connect entities to
financial instruments and markets. 5. Central Banks – financial institutions that regulate the
supply of money and handle the overall government finances.

According to (IndaStra Global, 2016), the five basic functions of a financial system are: 1.
Savings Function – regulation of savings to control the growth of investments. 2. Payment

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Function – provide a convenient way to pay goods and services, examples include credit card
payment. 3. Liquidity Function – financial institutions give investors the opportunity to liquidate
their investments. 4. Policy Function – create policies to control the macroeconomic variables
like interest rates or inflation. 5. Risk Function – provide protection using insurance.

Financial Management Information System: Financial Management Information Systems (FMIS)

is the system that supports the integration and automation of an organization’s management of
finances, accounting, and reporting (World Bank, 2017). According to (Piatti et al., 2018), there
is evidence that FMIS improves fiscal deficit conditioning and proper budget performance.
Furthermore, an investment in FMIS can lead to a wide array of improvements including better
decision making, improved transparency, and better financial management (Hashim & Piatti-
Fünfkirchen, 2018). According to (LaMarco, 2019), the common functions of an FMIS are ●
Reports ● Collection information ● Preparation and execution of budgets ● Support policy
decisions ● Process information for budgeting, analysis, and reporting ● Prepare financial
statements ● Audit trail Most governments have implemented an FMIS to improve efficiency
and streamline business processes (Mbaka & Namada, 2019). The Department of Budget and
Management (DBM) of the Philippines, in partnership with Globe Telecom and FreeBalance,
launched the financial management information system called Budget and Treasury Management
System (BTMS) to improve efficiency, accountability, and to make financial records transparent
to the public (Cordero, 2019). Moreover, the Public Financial Management (PFM) of the
Philippines, implemented Government Integrated Financial Management Information System
(GIFMIS) to improve the organization, 10 processing, and collection of financial information in
a central database (Philippine Public Financial Management, 2015). South Korea also developed
its own IFMS called Korean Financial Management Information System (KFMIS) (Sangwook,
2018). Moreover, FMIS significantly improved financial reporting and finance management in
Nigeria (Njonde & Kimanzi, 2017).

Financial Accounting :Financial Accounting is the branch accounting that deals with generating
a company’s financial statements (Smith, 2019). The methods that can be used are the accrual

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method and cash method. The accrual method records transactions when the transactions have
occurred, whereas the cash method records transactions only upon the exchange of cash (Kenton,
2020). According to (Franklin et al., 2019), the ten elements of financial statements are 1.
Revenue – income generated from selling or service by the organization. 2. Expenses – costs to
provide the goods or services by the company. 3. Gains – increase in income other than the main
revenue. 4. Losses – decrease in income outside of normal operations. 5. Assets – all the
resources the organization owns 6. Liabilities – the money the organization must pay to creditors.
7. Equity – the net worth of the organization. 8. Investment by owners – assets provided to the
organization to buy a part of ownership. 9. Distribution to owners – assets provided to owners.
10. Comprehensive income – organization’s net assets from non-owner sources.

According to (Browne, 2019), the four types of financial statements are: 11 1. Income statement
– all revenues and expenses are recorded here to calculate the net income. 2. Balance sheet – all
the financial transactions in the whole accounting life cycle are recorded here. 3. Statement of
retained earnings – shows a breakdown of a company’s earnings over a period. 4. Cash flow
statement – shows the amount of cash into and out of a company over a period. Proper
organization of financial records is vital for the long-term success of an organization (M. Martin,
2019). Improper record-keeping of financial related records can significantly affect a company’s
finances (E. J. Martin, 2019).

Financial Reporting: System Financial reporting is the act of releasing overall financial
information including financial statements, annual reports, or any financial information that the
organization wants to share with stakeholders and the public (Bragg, 2020). The International
Financial Reporting Standards (IFRS), the reporting standard used worldwide issued by
International Accounting Standards Board (IASB), are the set of common rules so all financial
statements will be consistent, transparent, and comparable around the world (Palmer, 2020). A
local version adopted from IFRS called Philippine Financial Reporting Standards is implemented
to ensure the consistency of financial reports in the country (Funa, 2018). All companies required
by law to pay taxes are mandated to file financial statements audited by an independent certified
public accountant (Isla Lipana & Co., 2020).

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Financial reporting automation not only reduces potential human error by minimizing manual
intervention, it also reduces the time and cost for key processes such as billing, management,
reporting, budgeting, and general accounting by 46% (Asavin, 2019). Furthermore, automated
financial reporting can help you make crucial business decisions by giving you an overview of
your overall financial health (Shackelford, 2020).

Loan Management System A loan is a sum of money that individuals or organizations borrow
from financial institutions, that will be repaid in the future. Most of the time, there is an added
interest and/or finance charges that should be repaid in addition to the principal balance (Kagan,
2020).

According to (Corporate Finance Institute, n.d.), the following are the types of loans: 1. Secured
and Unsecured Loans – a secured loan is backed by collateral, while an unsecured loan has no
collateral backing (Majaski, 2020) 2. Open-End and Closed-End Loans – open-end loans have no
restriction of use or duration; examples include credit cards. On the other hand, closed-end loans
have a specific purpose and amount that must be repaid within a specific period of time
(Majaski, 2019) 3. Conventional Loans – a loan that is backed by private lenders, not insured by
the government (Ramsey, 2018).

Loan Management System (LMS) an application that helps in the organization and processing of
loans for clients and institutions (Al-Harbi, 2018). Lenders need a loan management system
because of the following reasons: it improves loan organization, helps mitigate errors, and
increases customer satisfaction (Salesforce, 2019). According to (Kuhlman, 2019), the benefits
of using a Loan Management System are 1. Improved Speed to Completion – automation
significantly improves the processing of loan applications and loan decisioning by eliminating
tedious, repetitive manual steps. 2. Scalability and Growth – because of the manual steps in the
loan process are eliminated, more loan volume can be processed by the organization. 3. Better
Tracking and Transparency – the system can provide a comprehensive overview of all the loans
in different stages; moreover, advanced reporting capability enables the organization to instantly
see the financial related reports of the organization 4. Better Loan Processes and Results – only

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one system will handle the complete loan processing, so it is faster and easier to process multiple
loan applications.

According to (Synarion IT Solutions, 2020), the key features of an LMS are 1. Contract
management 2. Finance remittance facility 3. Extensive reporting 4. Payment collection 5. Entity
management 6. Managing information 7. Collecting and accounting for payments 8. Facility to
direct debit handling 9. Direct functionality of credit 10. Offer several tools for loans
management.

Loan Restructuring : Loan restructuring is a process used by companies to reduce interest rates
or extend due dates to avoid the risk of default on existing loans (Kopp, 2020). Usually, the
creditors change the terms of the loan agreement to keep borrowers from defaulting the loan.
(Denicola, 2020). Both the creditors and the borrower must agree on how much the borrower can
pay back the loan (O’Connell, 2017). This is an extreme option that occurs only when the
borrower is at risk of default due to different reasons (Malhan, 2020). It is projected that there
will be a wave of loan restructuring because of the enhanced community quarantine implemented
by our government to stop the spread of COVID-19 (Dumlao-Abadilla, 2020). Moreover, banks
are urged to allow borrowers to structure loans in the country (Casayuran, 2020). Also, Pag-IBIG
Fund offers a loan restructuring program to its borrowers (Kabagani, 2020).

Data Security: Data security involves putting policies, controls, and procedures to protect data
from issues including unauthorized access, accidental loss, and destruction (Mustoe, 2019). Data
protection techniques include tokenization, two-factor authentication, data encryption, access
control, and standards to limit unauthorized access (Tunggal, 2020). The three core elements of
data security are availability, confidentiality, and integrity (Buckbee, 2020).

Data is a valuable resource for organizations. Data breaches cost companies more than $3.8
million on average (Bonderud, 2019). Data must be protected from the following security threats
(Lin, 2020): 15 ● Spyware – malicious software installed on a computer installed without the
user’s knowledge ● Adware – software that displays ads through pop-ups ● Computer worms –
malicious software that automatically replicates itself in a network with the intention of opening

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a backdoor or remotely controlling a computer ● Trojan horses – a computer program that
appears harmless but has malware hidden inside ● Phishing – digital fraud ● Rootkits – a
software that enables bad actors to access a computer remotely ● DDoS – stands for distributed
denial of service; in this attack, multiple systems attack a network, and make it difficult for users
to access that network.

MVVM: The Model-View-ViewModel (MVVM) is a design pattern developed by Microsoft to

separate program logic and user interface (Rouse, 2019a). According to (Muntenescu, 2016), the
components are ● Model – abstracts the data source ● View -- notifies the View Model about the
actions of the end-user ● View Model – link between model and the view.

MVC: MVC stands for “Model-View-Controller” is an application model composed of three

different interconnected parts. They include the model, the view, and the controller. It can be
used to design programs for desktop, mobile, or web applications (Christensson, 2018). MVC is
a highly testable, extensible, and pluggable framework that offers full control over your HTML
as well as URL routing for SEO friendly URLs. According to (Tutorials Teacher, n.d.-a) below
are the three components of MVC: 1. Model A model represents the data that can be stored or
retrieved from a database. This is represented as a class in C#. 2. View View is the user interface
of the software. It displays the data from the model to the user and enables the user to modify the
data. View in ASP.Net MVC is HTML, and CSS. 3. Controller The controller handles all the
backend code for user requests. The user interacts with the view and creates an HTTP request,
which will be handled by the controller. The controller processes all the HTTP requests from the
user and returns the appropriate response dynamically.

ASP.Net MVC :The ASP.Net MVC is a web development framework created by Microsoft
(Guru99, n.d.). It is built on top of the .Net Framework. Moreover, the framework uses an MVC
(Model-View-Controller) Design Pattern where there is a separation of concern for each of the
components (Dot Net Tutorials, n.d.). Advantages include better support for Test Driven
Development, highly maintainable code, easier management of code because the application is
separated into three parts (model, view, controller), and it offers more control over the behaviour
of the application.

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AP:I API or Application Programming Interface is a technology that allows the software to
interact with external software components, operating systems, or 18 microservices (Wyatt, n.d.).
Basic components include the specification on how to use the API and the software interface
written to that specification (Rouse, n.d.).Moreover, APIs make development easier by
abstracting more complex code to the developer (Mozilla, n.d.). An example is Google Calendar
API. This API allows you to talk directly to Google servers and create calendar events (Gazarov,
2019). APIs act as a gate that manages the flow of data in a server, allowing companies to select
the information they want to share and keep (Chen, 2019).

Originally, web services use SOAP (Simple Object Access Protocol) to transfer data over the
internet; however, nowadays, most web services use REST (Representational State Transfer) –
another architectural style for sending data over the internet (Freeman, 2019). Furthermore, API
provides a layer of security because your 19 data is not fully exposed to the server (MuleSoft,
n.d.-b). According to (Red Hat, n.d.), the three approaches to API release policies are ● Private –
API for internal use ● Partner – shared for specific business partners ● Public – available to
everyone.

ASP.Net Web API: The ASP.NET Web API is a framework built on top of ASP.Net(Tutorials
Teacher, n.d.-b) for building cross-platform HTTP based services that can be accessed by a wide
range of applications (Mani, 2020). Applications include web, mobile, IoT, and desktop
applications (Jaiswal, n.d.).

REST API :REST is an acronym for Representational State Transfer. It is an architectural style
for APIs that was developed by Roy Fielding in his PhD dissertation in 2000 (Avraham, 2017).
REST can return JSON, XML, and YAML (MuleSoft, n.d.- a). The request is made up of four
components (Liew, 2018): ● Endpoint o URL of the request ● Body o The data you want to send
to the server ● Headers o Provide information about the request ● Method o Type of request you
send to the server o Five types of request methods: ▪ GET ▪ POST ▪ PUT ▪ PATCH ▪ DELETE.

Javascript :According to (MDN web docs, 2020), Javascript is scripting, interpreted language
mainly developed for web pages. Scripting is a program that runs directly and does not need to

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be compiled ((W3C), n.d.). Moreover, any program written in Javascript will be executed
directly by a web browser when the page is finished loading or as a response to an event trigger.
Aside from being a scripting language for web pages, it can also be used for server-side and
network applications.

Angular: Angular is a Javascript framework written in Typescript for building singlepage

applications (Angular, n.d.). Built-in features include animation, HTTP service, and materials
which in turn have features such as auto-complete, navigation, toolbar, menus, etc (Tutorials
Point, n.d.). Moreover, Angular is supported for web, mobile, and desktop applications
(Krukowski, 2018).

HTML 5 :HTML or HyperText Markup Language is the standard markup language for web
documents to be displayed in a web browser. It is not a programming language, but rather a
markup language that provides means to create structured documents and create web elements
(Wood, n.d.). HTML5 is the fifth and latest version of HTML 21 (Marshall, 2017). New features
include new page structuring, new inline elements, dynamic pages support, and new form types
(Kyrnin, 2019).

Bootstrap :According (Bootstrap, n.d.), Bootstrap is the most popular front-end development
framework for building web and mobile responsive websites. Bootstrap can significantly
improve the speed of development time by avoiding repetitive coding; you can reuse the code
within the framework so you won’t have to reinvent the wheel (Thapliyal, 2018).

JQuery : JQuery is a Javascript library designed to simplify HTML DOM manipulation, event
handling, animation, and creating asynchronous web applications. With the use of easy-to-use
API, versatility, and extensibility, JQuery has changed the whole web development process (The
JQuery Foundation, n.d.). As of May 2019, jQuery is the most widely used Javascript library; it
is being used by 73% of the 10 million most popular websites (W3Techs, 2019).

Xamarin.Forms: Xamarin.Forms is an open-source Model-View-ViewModel (MVVM)

framework to develop Android, iOS, and Windows applications from a single shared code base

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that will be rendered as good as native applications on each respective platform (Microsoft,
2020).

Microsoft is helping developers create the next generation of applications. At the Build 2016
conference, Microsoft announced that it is open-sourcing Xamarin command-line tools, libraries,
runtime, and the software development kit. Xamarin capabilities and services will also be added
to Microsoft DevOps and development tools offerings to provide a comprehensive solution in all
the phases of the mobile development life cycle; (Taft, 2016).

Data Privacy Act (RA 10173) :The Data Privacy Act of 2012, the first comprehensive law about
data privacy in our country, was passed by Congress in 2012, but the implementing Rules and
Regulations (IRR) were only issued in 2016 and became enforceable on September 9, 2016
(Mundin, 2020). This act aims to protect the rights of customers’ personal information to
confidentiality by creating a set of rules and regulations for companies to regulate the collection,
handling, and disposal of all personal information (Yulo, 2018). The National Privacy
Commission (NPC) is the branch of government assigned to implement this law (Mundin, 2017).

According to (Wall, 2017), RA 10173 appliesto all individuals and legal entities that process
personal information. Moreover, the law has extraterritorial application, even if the data is to be
processed outside of the Philippines if the equipment used for the processing of personal
information is based in the Philippines. Furthermore, the act applies to all the processing of
Filipinos’ personal information regardless of where they live.

ISO/IEC 25010 The quality model is the cornerstone of a product quality evaluation system. The
quality model determines which quality characteristics will be considered when evaluating the
properties of a software product. The quality of a system is the degree to which the system
satisfies the stated and implied needs of its various stakeholders, and thus provides value. Those
stakeholders' needs (functionality, performance, security, maintainability, etc.) are precisely what
is represented in the quality model, which categorizes the product quality into characteristics and
sub-characteristics. Figure 6. Eight Quality Characteristics.

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According to (ISO 25000, n.d.) the product quality model defined in ISO/IEC 25010 comprises
the eight quality,

Functional Suitability: This characteristic represents the degree to which a product or systems
provides functions that meet stated and implied needs when used under specified conditions.
This characteristic is composed of the following sub characteristics: ● Functional completeness.
Degree to which the set of functions covers all the specified tasks and user objectives. ●
Functional correctness. Degree to which a product or system provides the correct results with the
needed degree of precision. ● Functional appropriateness. Degree to which the functions
facilitate the accomplishment of specified tasks and objectives.

Performance efficiency: This characteristic represents the performance relative to the number of
responses used under stated conditions. This characteristic is composed of the following sub
characteristics: ● Time behaviour. Degree to which the response and processing times and
throughput rates of a product or system, when performing its functions, meet requirements. ●
Resource utilization. Degree to which the amounts and types of resources used by a product or
system, when performing its functions, meet requirements. ● Capacity. Degree to which the
maximum limits of a product or system parameter meet requirements.

Compatibility: Degree to which a product, system or component can exchange information with
other products, systems, or components, and/or perform its required functions, while sharing the
same hardware or software environment. This characteristic is composed of the following sub
characteristics: ● Co-existence. Degree to which a product can perform its required functions
efficiently while sharing a common environment and resources with other products, without
detrimental impact on any other product. ● Interoperability. Degree to which two or more
systems, products or components can exchange information and use the information that has
been exchanged.

Usability Degree to which a product or system can be used by specified users to achieve specific
goals with effectiveness, efficiency, and satisfaction in a specified context of use. This
characteristic is composed of the following sub characteristics: ● Appropriateness

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recognizability. Degree to which users can recognize whether a product or system is appropriate
for their needs. ● Learnability. degree to which a product or system can be used by specified
users to achieve specific goals of learning to use the product or system with effectiveness,
efficiency, freedom from risk and satisfaction in a specified context of use. ● Operability.
Degree to which a product or system has attributes that make it easy to operate and control. ●
User error protection. Degree to which a system protects users against making errors. ● User
interface aesthetics. Degree to which a user interface enables pleasing and satisfying interaction
for the user. ● Accessibility. Degree to which a product or system can be used by people with the
widest range of characteristics and capabilities to achieve a specified goal in a specified context
of use.

Reliability : Degree to which a system, product or component performs specific functions under
specified conditions for a specified period. This characteristic is composed of the following sub
characteristics: ● Maturity. Degree to which a system, product or component meets needs for
reliability under normal operation. ● Availability. Degree to which a system, product or
component is operational and accessible when required for use. ● Fault tolerance. Degree to
which a system, product or component operates as intended despite the presence of hardware or
software faults. ● Recoverability. Degree to which, in the event of an interruption or a failure, a
product or system can recover the data directly affected and re-establish the desired state of the
system.

Security: Degree to which a product or system protects information and data so that persons or
other products or systems have the degree of data access appropriate to their 27 types and levels
of authorization. This characteristic is composed of the following sub characteristics: ●
Confidentiality. Degree to which a product or system ensures that data are accessible only to
those authorized to have access. ● Integrity. Degree to which a system, product or component
prevents unauthorized access to, or modification of, computer programs or data. ● Non-
repudiation. Degree to which actions or events can be proven to have taken place, so that the
events or actions cannot be repudiated later. ● Accountability. Degree to which the actions of an

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entity can be traced uniquely to the entity. ● Authenticity. Degree to which the identity of a
subject or resource can be proved to be the one claimed.

Maintainability :This characteristic represents the degree of effectiveness and efficiency with
which a product or system can be modified to improve it, correct it or adapt it to changes in
environment, and in requirements. This characteristic is composed of the following sub
characteristics: ● Modularity. Degree to which a system or computer program is composed of
discrete components such that a change to one component has minimal impact on other
components. ● Reusability. Degree to which an asset can be used in more than one system, or in
building other assets. ● Analysability. Degree of effectiveness and efficiency with which it is
possible to assess the impact on a product or system of an intended change to one or 28 more of
its parts, or to diagnose a product for deficiencies or causes of failures, or to identify parts to be
modified. ● Modifiability. Degree to which a product or system can be effectively and efficiently
modified without introducing defects or degrading existing product quality. ● Testability. Degree
of effectiveness and efficiency with which test criteria can be established for a system, product or
component and tests can be performed to determine whether those criteria have been met.

Portability : Degree of effectiveness and efficiency with which a system, product, or component
can be transferred from one hardware, software or other operational or usage environment to
another. This characteristic is composed of the following sub characteristics: ● Adaptability.
Degree to which a product or system can effectively and efficiently be adapted for different or
evolving hardware, software or other operational or usage environments. ● Installability. Degree
of effectiveness and efficiency with which a product or system can be successfully installed
and/or uninstalled in a specified environment. ● Replaceability. Degree to which a product can
replace another specified software product for the same purpose in the same environment.

Likert Scale: Likert Scale is a rating scale that measures people's sentiment on a certain topic. An
effective Likert scale has 5-7 balanced responses people can choose from that have 29 a neutral
midpoint to measure the level of agreement (Liedke, 2020), each of the answers has an
equivalent value so that all the answers can be analyzed quantitatively (Bhandari, 2020).

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CSS: CSS or “Cascading Style Sheet” is a language created to format and design web pages
(Christensson, n.d.), and was created in 1996 to enable the separation of style and formatting,
and the content of web pages. Moreover, CSS allows you to style web pages to make them look
more presentable (Geeks for Geeks, n.d.).

RDBMS: RDBMS or Relational Database Management System is a database management

system based on the concept of using relational models in databases conceived by E.F. Codd in
his paper in 1970 (Dietrich, 2017). Entity-Relationship Diagram is the design diagram that is
being used to express the different relations of tables in RDBMS (Cooper, 2019).

Relational databases make storage and retrieval of data easier by using rows and columns
(Christensson, 2017). SQL is the main language for data manipulation in an RDBMS (Rouse,
2019b).

SQL (Structured Query Language) :SQL is a standard language for accessing and manipulating
databases. In 1986 and 1987, SQL became the standard of ANSI and ISO respectively
(W3Schools, n.d.). E.F. “Ted” Codd, a computer scientist at the IBM San Jose Research
Laboratory, was the first one who worked out the theory of relational model in the 1960s and
published it in 1970, his paper will later become the theoretical basis for relational databases
(Heller, 2019). According to (SQLCourse, n.d.), some common relational database 31
management systems that use SQL are Microsoft SQL Server, Oracle, Access, etc. Here are the
basic SQL commands based on (Carnes, 2020): ● SELECT ● UPDATE ● DELETE ● INSERT.

Kingsley O. et al. (2013) state that the concept of automation has been variously applied in most
computing fields. This involves utilization of computing or electronic devices to undertake the
tasks that are being handled by people. It is a pertinent factor in a profitable and soundly run
financial institutions. Financial transactions through manual system of operation are prone to
errors and unimagined complexities, making it so difficult a task maintaining all entries of users
account, search records of activities, handle loan deduction errors and generate reports.
Computers running automated system are targeted towards eradicating the menace-hence making
the underlying activities efficient and providing the fast response needed.

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While Dhar et al. (2009) describe a browser based automated loan system includes a loan
engine offered individually to financial institutions to set up, operate and manage loan product
offerings, a consumer website interface having a loan application form with data fields relevant
to the loan product offerings, a designer component that establish task in the form of a loan
process checklist associated with each loan product offering, and a workflow engine for
automatically evaluating the loan application form using the applicable loan process checklist in
conjunction with rules, logical, mathematical computational components, and risk based offer
configuration for generating an instant loan offer when a borrower qualifies.

In addition to, Green et al. (2003) also said that an automated system and method for
reviewing and assessing compliance with legal compliance requirements for loan applications.
Loan application data is extracted from client loan origination systems and transmitted as a loan
information file over a secure communication network to an automated compliance assessment
system server where the loan information file is audited for compliance with Federal, state and
local legal compliance requirements. The loan information file is reviewed for legal compliance
requirements imposed by Federal, State, and Local jurisdictions, as well as licensing
requirements that the client loan company and related personnel must satisfy.

SUMAN JAIN (Ethiraj College for Women) ”A study on personal loan of HDFC” In the year of
2008-2009. To identify loan’s type and disbtarsement by HDFC and concluded personal loans
are disbursed without complex procedures, mechanism in such a way it earns can good return,
where there are no defaulters. To make the customer aware of the schemes and the offers, the
bank should position its brand, market analysis and the customer research. The bank must
manage its working sometimes they need a loan for medical emergency and car repairs to makes
the aware of the offers and schemes, personal loan as well as better response of people as today
Personal loan is required for fulfil the requirement of life.

SHAMILKUMAR.Y.H (Institute of Management Studies) “Evaluation of customer satisfaction

on personal loan (HDFC and ICICI)” during the year of 2009 to 2010 focusing. It is help to
understand that the technology in banking as well as how its effect on customer. Overall
customer satisfaction is good for the ICICI compare to HDFC. It helps to poor and middle

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income people, in this survey we got that more people are from middle class, they want to fulfills
their requirements. He is cover the cities only (hubli) sampling technique- non probability
sampling (Judgemental)

JASVEEN “ICICI Financial Personal Loan” its helpful marriage related expenses or child higher
education. ICICI competitors like HDFC, reliance etc. There might have been a tendency among
the respondents to amplify or filter to their response under the testing condition.

RANJEEL SINGH “Comparative Analysis of SBI and HDFC Bank”(ACME Institute of

Management and Technology)” during the year of 2008 to 2011. To Focusing customer
satisfaction, characteristics. To determine the other bank those are competing with the same
product rang in personal loan to conclude 45% of the government employee customer prefer SBI
and 30% of the self-employed and business man’s customer prefer HDFC. Customer prefer other
bank like ICICI, PNB, BANK OF BARODA. SBI interest rate is very low so most of the
customer prefer, HDFC procedure of loan processing is very low comparing to SBI. Bank offers
free insurance, special co-branded debit cards which makes its product unique. Bank aim to serve
from the teen agers to senior citizen. Low income class people face difficulty to taking personal
loan. Research type is descriptive research. Sampling technique is convenience technique.

Strength ofthe existing management system. Paper based system is cheap and easy to implement.
It is cheap in terms of costs because the staff does not spend a lot of money to purchase paper
and files compared to purchasing hardware, software and maintaining them.

Weakness of the existing management system. The existing management system has a lot of
weakness, these include: Retrieval of clients’ record is difficult and time wasting as it takes a lot
of time to search for a particular file as they are very many. Updating of client’s record is hard
and at times impossible. Clients’ records can easily be misplaced and lost due to the large
number of files. There is also space wasting since files are kept in a store that needs a lot of
space. This process is problematic because ofthe vulnerability for incorrect data entry. Clients’
information can only be accessed while at the premises ofthe Micro Finance -I-

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Management information systems :MIS is a system or process that provides information needed
to manage organizations effectively. Management information systems are regarded to be a
subset of the overall internal controls procedures in a business, which cover the application of
people, documents, technologies, and procedures used by management accountants to solve
business problems such as costing a product, service or a business-wide strategy. Management
information systems are distinct from regular information systems in that they are used to
analyze other information systems applied in operational activities in the organization.
Academically, the term is commonly used to refer to the group of information management
methods tied to the automation or support of human decision making, e.g. Decision Support
Systems, Expert systems, and Executive information systems. For any organization’s success,
MIS plays key role. Another criticism cited under Directed Credit Programs relates to the
transaction costs for both the lender and the borrowers caused by direct credit programs.

Related Research The expenses incurred by the borrower in complying with the directed credit
program monitoring and proposing Requirements entailed in managing multiple lines of credit
boost these costs. Costs include opportunity costs of time spent in navigating cumbersome
borrowing procedures, transportation costs on monitoring, costs of providing acceptable
collateral and in some cases bribes to influence lending, Desai and Mellor (1993). There is
therefore need to build a system that can help to minimize this costs through the web technology.

Web-Based System/Applications According to archive systems (2008) web-based systems refer

to software or services such as ASPEN 360 that are offered over the WWW and use a web
browser to access them. For web 17 based application, the correctness of services provided by
the every component was the majority significant thing and the integrality and consistency
guarantee the complete system to work suitably. Tn current WBA consider tranquil in their fast
inflating phase, therefore the researches are looking web based software development, web based
software maintenance, and web based software (application) testing and other WBA implement
real world computer application which is looking to maintain user satisfaction.

Web overview: The world wide web started in 1990 at the counsel European pour le Recherché
Nuclear (CERN) in Switzerland’s in that time the laboratory was facing difficulties while they

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are sending important documents and graphics via the internet therefore they were needed
something better than simple file transfer. Tim Bemers-lee was working in CERN when he
developed the World Wide Web portion of the internet (webopedia, 2008).Web is a subset of the
internet that uses images, multimedia elements and hypertext navigation to communicate
information ~obally. Its a connection of computers worldwide whose hosts serva and transit data
among computer users.

Web Research :This study included conducting web research on the different MFIs and articles
on pride Microfinance.

Web application: Casals (2005) defined the web application as a software application that will
deliver its thnctionality to a user from a web sewer, through a network such as the World Wide
Web or intranet. A web application is a collection of logically connected web pages managed as
a single entity, a web site, on the other hand, will contain one or more that will result from
different contracts with the customer (Auckland, 2004). The fhndamental purpose of the web
application is to thcilitate the completion of one more task (Baxley 2003). The software and
database exit on a central sewer rather than being installed on the desktop system is accessed
over a network .web-based application are the ultimate way to take advantage of today’s
technology to enhance efficiency, and give the opportunity to access information from anywhere
at any time saving money and improving interactivity.

Web Loan management System According to Securities Exchange Act of 1934, security is property,
which is pledged as collateral for a loan. It is a binding pledge made by lender to the borrower
to make a loan usually at a stated interest rate within a given period of time for a given purpose, subject
to the compliance of the borrower to stated conditions. Collateral security is an additional security
supplied by the borrower to obtain a loan. Most commonly used to mean some security in addition to the
personal obligation of the borrower to repay a loan. There are two kinds of loans that the groups are
getting. First is agricultural loan and second is term loan. Presently most of the loans disbursed to SHGs
are agricultural loans that are of oneyear duration. A SHG can get a loan from the bank if it has saving of
minimum of 50000 Ugandan shillings. Generally SHO takes six to twelve months to reach the required

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savings. The rate of interest on the loan is 24 percent if the installment becomes due for more than three
months then the interest rate becomes 36 percent annually.

Pride Management Information: System The microfinance sector is also quite diverse in its use
of information systems. Generally there are the following three types:

Manual System: Some MFIs still rely on manual systems, which involve maintenance ofrecords
in forms and ledgers. Organizations having manual systems are either small Micro-credit
programs or NGOs.

Semi- Automated System :More than 50% of IVIFIs are operating in a semi automated mode.
Within this category, the spreadsheet is the common tool being used either in conjunction with a
manual system or with an MIS application that does not fhlfill the information requirements of
the MFI. The majority of non-regulated MFJs will semi automated systems.

Fully Automated System :Few MFIs are fortunate enough to have a ffilly automated and
integrated MIS fUlfilling the whole information requirements ofthe organization. Such systems
will be existent with banks or regulated MFIs.

Loan Management System :The L M System is a complete multi-user loan management system.
It was created to be used to control the day to day transactions as well as offer comprehensive
management information. This will be specifically designed to meet the unique requirements of
organizations with Installment Debtors. The system can be used by banking institutions, micro-
lenders, financiers as well as retail institutions using installment sale type transactions e.g.
Furniture companies, computer companies. The system was designed to cater for the tracking of
a deal from the quoting stage right through to the settlement or natural expiry. It will handle all
the unique requirements ofthis industry such as repossessions, electronic payments, structured
collections. radiances etc.

Postbank of the Philippines Loan Management System:According to Bhagwatsaran (2015).

Postbank’s Loan Management System. Riding on the successful delivery of the loan
Management System, Postbank has taken the next step in modernizing the experience for deposit
processes. With 25 branches located nationwide and a long-distance legacy of bringing banking

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services closer to the homes of Filipino families in rural areas, Postbank has certainly made a
mark in the lives of many., it is also their commitment to this level of trust, focus and efficiency
that makes them a perfect complement to Postbank as proven with the delivery of the Loan
Management System earlier this year which has led to the cementing of the partnership with the
awarding of the Deposit Management System.

Ever First Loan Corporation Loan Management System: According to Cerquit Loans Developer
(2013).Application of loans, managing receivables, financial assistance, collections, and creating
reports. It aims to promote productivity, efficiency and convenience to not just collection
officers, but to the managers, executives and business owners. Ever first has been providing short
term pension loans to SSS pensioners in the Philippines, and in this short span of time, they have
grown to thirty-five branches with more than one-hundred service-oriented employees. We are
inspired by their mission to provide financial assistance to our fellow Filipinos with such
integrity and dedication.

Black Cat Loan Management System.: According to Panther International (2012).LLC is an

award-winning software and Services Company specializing in the transportation industry, Black
Cat Loan Management System is an innovative, web-based solution designed and developed by
Panther International, LLC to manage the entire cycle of loan. They use Loan Management
System to centralized the full-featured system facilities, the loan origination, underwriting,
servicing, compliance, collections, document management and closeout. As Mrs.Rublequoted
my experienced and management skill with the help of this loan Management System will
greatly benefit the clients we serve.

Mortech Loan Management System: According to Lincoln, Nebrasca (2011). Mortech launches
all-inclusive front-end loan management system by using bull’s eye solution a mortgage
technology software company which offers full automated underwriting system and credit and
document management platforms to speed entire loan closing cycle. They use Mortech Loan
Management System to allow their loan officer the freedom to price scenarios with instant result
in an easy to use interface. Also it allows the freedom to customize down to a very detailed level

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thus allowing administrators a great deal of flexibility in terms what will price and the associated
margins.

Conceptual Framework
IPOO diagram

Statement of the Problem

Scope and Limitations

Significance of the Study

Definition of Terms

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Chapter 2

METHODS AND PROCEDURES

Project Design
System Architecture
Use Case Diagram
Context and Data Flow Diagrams
Database Schema [with Table Attributes and Domains]
Wireframes (User Interface)

Locale of the Study

Participants of the Study

Data Gathering Tools

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Data Gathering Procedure

Data Analysis

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