Delinquency Management, Legal Notices & Recovery

1. Overview & Business Value#

This comprehensive operational guide details the architecture, business workflows, configuration parameters, and execution steps for Delinquency Management, Legal Notices & Recovery within SmartERP.

Manage delinquent loan recovery, trigger automated SMS reminders, generate formal legal demand notices, and attach guarantor collateral.

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2. Prerequisites & Security Access Groups#

• Required Modules: smarterp_sacco_core, smarterp_equb, smarterp_loan_management
• Security Groups:
  • SACCO Loan Officer (Technical ID: smarterp_sacco.group_sacco_officer)
  • SACCO Credit Committee Member (Technical ID: smarterp_sacco.group_sacco_committee)
  • SACCO General Manager (Technical ID: smarterp_sacco.group_sacco_manager)
• Master Data Dependencies: Member KYC profiles, share capital registers, savings product tiers, loan products with reducing-balance schedules, and Equb rotational pool configurations.

3. Step-by-Step Configuration & Execution#

Step 1: Navigating to the Module Interface#

1. Log into your SmartERP instance at https://smarterp.et/odoo.
2. Open the main App Switcher (grid icon in the top-left corner).
3. Select the SACCO & Equb app icon.
4. From the top navigation bar, open SACCO & Equb → Members → KYC Registry / Savings Accounts / Loan Applications / Equb Pools.

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Step 2: Creating and Parameterizing Records#

1. Click the New button in the top-left control panel.
2. Complete the mandatory fields in the record form:
   • Member Identification Number (Mandatory): Unique membership number complying with Ethiopian Cooperative Commission rules
   • Full Name & Kebele ID (Mandatory): Verified member identity with physical residence verification
   • Share Capital Subscriptions (Mandatory): Subscribed shares not exceeding statutory 10% member ceiling (Proclamation 985/2016)
   • Primary Savings Product (Mandatory): Compulsory regular monthly savings account configuration
3. Configure optional operational parameters and localized tags as required:
   • Guarantor & Collateral (Optional): Approved co-signers with locked savings accounts or registered vehicle/property lien
   • Equb Rotational Group (Optional): Linked digital Equb pool with lottery draw eligibility
   • Beneficiary Nominee (Optional): Designated next of kin for death or disability benefit transfer
4. Click the Save icon in the control bar to commit the record.

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Step 3: Validating and Processing Transactions#

• State Transitions: Execute operational state progression (Application → KYC Verified → Approved → Active / Disbursed → Delinquency Monitored → Settled).
• Ledger & System Impact: Loan disbursement debits loans receivable and credits cash/bank; loan repayments credit interest income and loan principal, updating 5-tier NBE provisioning registers.
• Audit Verification: Automated recording of author ID, timestamp, and immutable revision history.

{screenshot:delinquency-management-and-recovery-transaction-processing-state}

Progressive Recovery Escalation Protocol#

SmartERP structures loan recovery into automated progressive stages to maximize debt recovery while maintaining member goodwill:

flowchart TD
    A["Installment Due (Day 0)"] --> B["Day 1-5: Friendly SMS Payment Reminder"]
    B --> C{"Payment Received?"}
    C -- No --> D["Day 15: Automated Telephone Reminder & Late Fee"]
    D --> E["Day 30: First Formal Demand Letter (Notice)"]
    E --> F["Day 60: Second Demand Letter & Guarantor Notification"]
    F --> G["Day 90: Final Legal Notice & Pledged Collateral Freeze"]
    G --> H["Day 180: Legal Litigation & Collateral Liquidation"]

Triggering Automated SMS & Letter Reminders#

1. Navigate to SACCO > Loans > Delinquency Recovery Queue.
2. Select overdue cohort (e.g., 31–60 DPD Special Mention).
3. Click Dispatch Batch SMS Reminders:
   • Personalized SMS delivered in Amharic and English detailing overdue amount, penalties, and payment link.
4. Click Generate Formal Legal Demand Letters:
   • The system generates signed, serialized demand letters formatted according to Ethiopian civil procedure codes, sent via registered mail to the borrower and all co-signers.

Attaching and Freezing Guarantor Savings#

When a delinquent loan crosses into Substandard (61+ DPD):

1. Open the delinquent loan record and click Invoke Guarantor Cross-Liability.
2. The system sends formal notifications to co-signers.
3. If the borrower fails to rectify within 15 days:
   • The system automatically debits the overdue installment amount from the guarantors' pledged savings passbooks.
   • Posts accounting offset entries reducing loan arrears and decreasing guarantor savings balances.

4. Advanced Configuration Points#

• Automated Actions & Scheduled Tasks (Crons):
  • SACCO: Accrue monthly member savings interest (smarterp_sacco.ir_cron_savings_interest): Runs on the final day of each calendar month to credit interest
  • Loan: Evaluate 5-tier NBE delinquency classification (smarterp_sacco.ir_cron_loan_delinquency): Runs nightly to compute loan loss provisions per NBE directives
  • Equb: Execute scheduled lottery draw (smarterp_sacco.ir_cron_equb_draw): Runs on defined pool cycle dates using provably fair random selection
• Custom Print Templates & Reports:
  • Member Savings Passbook & Transaction Ledger
  • Loan Amortization Schedule (Reducing Balance)
  • NBE 5-Tier Delinquency & Loan Loss Provisioning Statement
  • Annual Patronage Dividend Distribution Schedule
• Multi-Company Rules: Record-level security isolation under Company 1 (Ashewa Technology Solutions S.C.), preventing cross-company ledger leakage across parent and subsidiary legal entities.

5. Comprehensive Troubleshooting Matrix#