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Cliford CSC Project - Doc Chapter One To Five

The document discusses the development of a computerized loan management system that uses credit risk and evaluation models. It aims to develop an authenticated payment system, secure customer database, and tracking system. The system would automate the loan application and approval process for both banks and customers. It would assess credit risk and possibly predict bankruptcy. This could streamline the "tiring and complicated" existing manual loan process in Nigeria.
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0% found this document useful (0 votes)
31 views53 pages

Cliford CSC Project - Doc Chapter One To Five

The document discusses the development of a computerized loan management system that uses credit risk and evaluation models. It aims to develop an authenticated payment system, secure customer database, and tracking system. The system would automate the loan application and approval process for both banks and customers. It would assess credit risk and possibly predict bankruptcy. This could streamline the "tiring and complicated" existing manual loan process in Nigeria.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
You are on page 1/ 53

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

Financial institutions offer loan services to small organizations individuals and this

was initiated after a number of considerations on the banking system. This project

attempts to design and implement a computerized loan management system for

rejecting or approving loan request using credit risk and evaluation models and

know about loan sanctioning and lending procedure among banks across the globe.

It also attempts to use the credit risk and evaluation models to develop a strict

approach to these areas, to think through policies, principles, and practices to

accomplish the new tasks. By the time the system is fully implemented, it will be

able to understand, think, and be fully equipped to handle today’s and also for

tomorrow’s credit managerial work in financial institutions. Moreover, there is a

significant question for banks and their regulators is assessing the accuracy of a

model’s forecasts of credit misfortunes and losses, particularly given the small

number of accessible forecasts and estimates due to their typically long planning

horizons. Utilizing the credit risk and evaluation, we propose evaluation techniques

for credit risk models based on cross sectional dependent. In particular, models are

evaluated and accessed not only on their estimates over time, but also on their

forecasts at a given period in time for simulated credit portfolios. Once the

1
estimates corresponding to these portfolios are generated, they can be evaluated

using various statistical methods. This project when implemented will provide a

smooth channel for processing of Loans in financial institutions across the country.

The proposed system upon completion will replace the manual loan application

process and automates the loan process from both, the banks as well as the

customers’. Customer can now apply for loans seamlessly without having to visit

the banks and if approved customers can track their loan details from the comfort

of their homes. The loan management system with credit risk and evaluation

models is a very efficient process to handle all loan related transaction in a very

accurate and convenient way. The Credit Risk becomes important to implement in

financial and accounting. It incorporates bankruptcy forecasting, financial distress,

corporate performance bunching / expectation and credit risk estimation. The

online Bank loan management system is an interface which facilitates a customer

to apply for a loan using a digital channel through the internet, the system check

for possible bankruptcy prediction, credit risk estimation to track the status from

time-to-time. This system provides detail about the customers’ financial status over

a period of time, their loan details, risk estimation and possible bankruptcy

prediction. Getting a loan is a very tiring and complicated process in Nigeria. It

may take weeks or even months for loans application to get reviewed, before

2
getting approvals and people have to visit the financial office for documentation

and customer verification.

1.2 Statement of the problem

Currently, most financial institutions do not have any automated system to help

manage the data of customers applying for Loans, Grants and Investments with

credit risk evaluation. They have to rely on manual procedures which are time

consuming and don’t calculate the credit risk evaluation in case of bankruptcy.

This manual procedure doesn’t maintain customer records with proper security and

can’t track details easily. It doesn’t allow the customer to check their loan request,

submit bank account statement if need be. The Existing manual procedure isn’t

equipped with basic functionalities of fast access to information such as customer

details and maintenance of all the loan details so it involves lots of paperwork.

Apart from administrative task being cumbersome, manual system of registration is

also long and error-prone.

1.3 Aim and objectives of the Study

The aim of this study is to develop a computerized loan management system for

controlling loan request using credit and evaluation models that will perform the

following:

i. To develop an authenticated payment system to easily disburse funds to

various users through IP address

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ii. To develop a secured database for users personal information and

verification

iii. To monitor users verification payment plan and authenticate IP for easy

refund and reverse of funds

iv. To develop a tracking system for users to navigate and monitor activities for

the platform

1.4 Significant of the Study

One of the major reasons for embarking on this project is to facilitate the ease of

transfer of loan through XML web service, HTTP protocol and SMTP gateway for

adequate loan management and monitoring. The technology mentioned above is

employed due to the simplicity in their application and implementation and a very

stable security feature. Data processing is very fast due to the protocols

implemented by them. The delivery is guaranty due to enterprise nature of the

application, being an online application makes it accessible anytime and anywhere,

while using a text based protocol (XML) make data smooth and platform

independent such that can be consumed by any solution that support the protocol,

also ease the installation and development procedure. SMTP is a great asset in the

whole enterprise because it enables access to SMS gateway with ease and cost

effective.

4
1.5 Scope of the Study

This project is fully and working banking solution/application or software that has

the capability to create account for new customers, it holds daily transaction.

Banks can generate ledger, account statement, balance sheet. But the important

part of the project is the loan management module. Loan management module is

the module that creates account or generates account number and monitors the

activities of the bank. Being an online remote area, the loan module takes care of

loan repayment, interest reduction on each loan account.

The features are possible due to the enterprise level or nature of the solution. The

enterprise nature is due to the tools employed such as MS Access database which

is a relational database system with the capability of XML (extensive markup

language) process; the deployment server is apache which is the fastest, secure,

robust enterprise ready server and an open source solution. Being an open source

makes the processing engine to be very reliable.

1.6 Limitation

a) The SMS technology (like email) does not guarantee set or guaranteed

delivery of the message, therefore some message may be delayed, block or

lost.

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b) The cost of the message is transferred to the server, is based on the number

of messages being sent and is network dependent, although exist in

reimbursing such cost and operation volume based tariffs.

c) The cost of band-width and domain name.

1.7 Definition of terms

Commercial and industrial loans: loans to business or industrial firm.

Consumer loan: loans for customers to purchase goods.

SMS: short massage services.

SQL: structural query language.

Loan: money that an organization such as bank lends and somebody borrows.

ASP.NET: hypertext processor

HTML: hypertext markup language.

SMS gateway: device or service offering SNS transit, transforming massages to

mobile network traffic, allowing transmission or receipt of SMS massage with or

without the use of mobile phone.

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CHAPTER TWO

LITERATURE REVIEW

2.1 Web-Based System/Applications

According to Archive systems (2018) 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 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. The

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.

2.2 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 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, 2018).Web is a subset of the internet that uses images, multimedia

elements and hypertext navigation to communicate information globally. It’s a

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connection of computers worldwide whose hosts serve and transit data among

computer users.

2.3 Web application

Casals (2015) defined the web application as a software application that will

deliver its functionality 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, 2014). The fundamental purpose of the web application is to facilitate

the completion of one more task (Baxley, 2017). 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.

2.4 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

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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.

2.5 Loan Management System

Banks, being a financial institution, are engaged in the acceptance of deposit of

money, granting credit (by means of overdraft, loan) and other transactions such as

foreign exchange, discount of bills, etc. Loans are one of the transactions being

done in the bank which is a type of debt. Similar to all debt instruments, a loan

includes redistribution of financial assets over time, between the borrower and the

lender. The lender initially lends an amount of money to the borrower initially,

which the borrower has to pay back to him, usually but not in regular installments.

This service is generally provided at a cost which is referred to as interest on the

debt. To pay off the loan, a fixed amount (for paying off and interest together) is

paid periodically. A system that manages this whole system is called loan

management system. To provide decision-making assistance at the highest level of

management, computers in business have risen to automate the jobs. Large

corporations and industries depend on computer’s accuracy and efficiency in its

operation, with the environment at fast pace as it has the ability to retrieve, store

and analyze data at tremendous speed at low cost. This development is viewed as

an opportunity to control the data processing and increase the influence of the

9
organization. Some organizations have their businesses totally dependent on the

accurate computer operations. Thus, in the area of loan and advances, the banking

industry is no exception to the advantages a computer provides, which contributes

to the economic development in large measures. Loans are readily given to people

who have an account (mostly current account). Apart from being a customer, there

are other conditions that necessary to be fulfilled for giving an individual a loan.

Such conditions may include: having at least one guarantor, provision of collateral

security and filling the bank loan management form. Thus, the role of a loan

management system can never be overemphasized. A computerized loan

management system helps the banks to work without stress.

2.6 Loan Lending

A study by Egiamueosoe (2017) established the effect of credit default on the

growth in turnover of LAPO MFB in Benin found that the lending institutions were

performing poorly as a result of poor lending practices. Poor lending practices like

luck of due diligence during loan appraisal contribute to poor loan performance

hence high default rate which influence financial performance negatively Godwin

(2007) Issues in microfinance institutions. The study therefore recommended that

financial institutions should focus more on individual loans product and services;

employees training be enhanced; and good governance be instituted to set pace for

the financial performance since it was of paramount important for the growth of

10
the institution. The study failed to expound on how individual loan products

diversification could contribute to the efficiency of loan lending practice of

SACCOs in Nigeria.

2.7 Loan Monitoring

Wanjiru (2016) explored the factors affecting loan disbursement performance of

SACCOs in Kiambu County found that loans were granted from mobilized funds

and failure to repay could bring down the financial institutions as they only

depended on these funds as the only source of fund hence loan agreement, was

very crucial to reduce risks associated. Best practices required that loans were

considered to be delinquent if a single payment was not honored at the time

stipulated in the loan agreement. The outstanding loan balance was considered past

due after one failed to meet one repayment obligation. To control delinquency,

immediate action should be taken first to assist first truck and the loan that was

reported past due. Loan provisions were on the first line to defend and protect

members’ savings against identified risks of losses to the SACCO. The Sacco must

look for other measures to enforce repayment of the outstanding loan before

written off these loans from the books.

2.8 Loan Administration

Odunza (2017) studied causes of inefficiency and ineffectiveness in credit

administration in Chuna SACCO society limited was due to lack of qualified

11
personnel in the SACCOs; poor internal control systems, insufficient funds for

lending; inadequate training; lack of enhanced technology; and poorly defined

management boundaries which allowed credit management committee manipulate

the credit policy. The research recommended that SACCOs should source and

mobilize more funds for lending through aggressive mobilization from members

and external borrowing and allocate these funds to investment with high returns;

employ more competent staff; restructure the organizational; introduce more

attractive loan products to satisfy members needs and also harmonize interest rates;

encourage team work with well-defined boundaries; provide education and training

to relevant stakeholders; adopt effective technology, ensure competition with other

financial institutions; rebrand the SACCO offices; participate in corporate social

responsibility. The research did not explain how credit administration would

contribute to efficiency in time management of loan disbursement processes.

Nduwayo (2015) study on the effect of loan management on financial

performance of Bank of Kigali found out that there was correlation between loan

management and financial performance. The study found out that the loans were

well managed, because all indicators considered at that level shown that the

employees working in credit department were experienced in credit management,

there was professional training organized in order to keep them up to date, they are

12
recognized being independent in loan review, lending procedures and guidelines

designed and implemented to improve loan management.

Ajiambo (2013) investigated the way and level in which loan policy correlated

with financial of these institutions. The study recommended that SACCOs should

frequently review and update their credit policies to enhance proper evaluation of

loan applications and ensure that loan applications are appraised and ranked

according to merit.

Ajiambo (2013) study also recommended that SACCOs to ensure timely loan

disbursement to facilitate loan recovery and minimize administrative costs which

would lead to growth of SACCOs’ wealth. Furthermore, it was recommended that

SACCOs should establish delinquent loan provisions that would be adequate to

cover bad debts and safeguard SACCO funds and ensure proper recording loan

assets to avoid overstating in the books. Additionally, the government should

review legal framework for the SACCOs to ensure sound loan policies are put in

place for improved financial performance via loan disbursement practice.

Mugambi (2015) explored the influence of Loan recovery practices on SACCO`s

performance of SACCOs in Mount Kenya Region. The study established that there

was need for the SACCO`s regulator to enforce the use of a standard set credit

policy to mitigate the level of credit risk associated with credit exposure among the

SACCOs in the sector and reduce guarantors exposure to these credit risks. Since

13
the guarantors bears the burden of repaying the loan after the borrower defaults to

pay other forms of loan security like collateral should be introduced to shift the full

loan burden to the borrower and reduce the risk attached to guarantors.

Muchoki (2014) studied the influence of commercial bank loans on financial

performance of Savings and Credit Co-Operative Societies in Kisumu, Kenya. The

study established that commercial bank loans did not affect Sacco’s business since

the paired test established a p value of 0.004 h. This can also be reflected by

different indicator of growth like increased number of members in the SACCOs,

growing amount of loans disbursed and growth of mobilized savings which

increased year after the other. It was further established that the competition

between banks and SACCOs benefited members due to reduced interest rates in a

view of maintaining and remaining is business and retaining market share. This

was reflected in the results as was indicated where 51% agreed that it was now

easier to obtain loans from SACCOs. However it was reported that 60% of the

respondents were affected by the pro rata requirements set by the SACCOs.

Following these findings, the study called on the government to intervene and form

an act that could protect the SACCOs an offer equal opportunity to financial

institutions for outsourcing for funds.

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2.9 Loan Security Management

Karagu (2014) study established how financial performance was influenced by

different factors in SACCOs in Kenya. The study established that misappropriation

of funds influence financial enhancement in SACCOs. The study concluded that

SACCO’s internal control system and the internal audit department needed to be

improved. It was also established that the financial performance of these

organizations was influenced by the investment decisions instituted. It also

emerged that prudent projects were in forefront whenever better returns were to be

achieved in the organizations. It was also found that in order to cup defaulting in

the loans there was need to introduce collateral securities to enhance loan recovery

strategies and discourage delinquency in SACCOs. According to Karagu,(2014)

members withdrawal affects Sacco’s performance adversely. In order to compete

with other organizations such as Micro finance Institutions, the study

recommended the introduction of more products in SACCOs. Mutua, (2016)

investigated effect of credit risk management and the performance of SACCOs in

Kuje, kaduna where he found that there existed a strong positive relationship

between loan default and financial performance of SACCOs. Mutua, (2016) also

found that there was positive relationship between loan policy in mitigation of

risks and loan portfolio performance of SACCOs and there was still a strong

positive relationship between credit monitoring and loan disbursement

15
performance of SACCOs. The study recommended improvement in internal

controls so as to enhance on loan monitoring and there should be a continuous

review of loan policy to realize current trends. It also recommended on the limit of

the borrower`s age to mitigate the risks associated in lending practices. Meanwhile,

the Role of Co-operative Loans in Rural Finance: Evidence from LAPO NGO co-

operative society Delta State, Nigeria. This project examines how computerizing

the loan disbursement process made by co-operative societies in rural areas would

meet the financial needs of their members both far and near and, by extension, the

role of the cooperative lending in rural finance. The study makes use of primary

data from three focus group discussions comprising forty two members selected

randomly from three co-operatives in two local government areas. Data was

analyzed using tables of numbers, questionnaire and quotations from participants.

The study found that the financial needs of the members were met through loan

granting at reduced interest rates without the pledging of fixed and financial assets

as collateral but was also faulty as a result of poor documentation and record

keeping for references purpose. The low interest rate on loans reduces the

likelihood of members patronizing money lenders and of possible loan defaults.

The personal guarantor arrangement greatly enhanced the inter-personal

relationship among members enabling them to provide support to members in

trouble and reducing their individual poverty level. However, there may be need

16
for emergency loans that can be repaid over a short period of time to ease the

financial burden of the members and enhance social and financial capital.

2.10 Analysis of the Existing system

Ideally, any cooperation society would basically draw her income from

membership registration fee and routine saving contribution of the members over

the months. This savings are separated into project and ordinary savings. The

ordinary savings which is a fixed amount is mandatory for every member and it is

non-refundable, while the project savings is according to the varying business

capabilities of members which can be re-embossed as condition applies. These

contributions are however traded with through giving of loans and stocking goods

so as to enhance the financial income of the society and from whence they

calculate the benefit of an individual based on the amount so contributed on a

monthly or yearly basis.

2.10.1 Weakness of the Existing System

The idea behind embarking on this task is to solve the problems associated with the

old system of savings scheme management which include the following:

i. Data redundancy: Presently in the old system the probability of making

errors in recording the data containing every transaction being made by the

members of the cooperative society is high.

17
ii. Data insecurity: In the old system due to the fact that the data is being

stored manually on files, security of these important files is not assured

because there can easily be a break-in in the offices where the files are

located.

iii. Inaccurate record: In the old system because the present saving scheme is

being operated manually, the presence of bulky files makes it hard to

maintain the records which can lead to inaccurate record keeping.

iv. Difficulty in data retrieval and modification: Due to the presence of bulky

files in the old manual system, data retrieval about a particular member’s

transaction would be difficult to retrieve especially if there is little time

being set out for a report to be derived from these records.

v. Lack of data integrity: Presence of bulky files in this old system can lead

to excess scattering of files which would make the accessing of a particular

file more difficult and time consuming to do just the arrangement to achieve

this.

2.11 Analysis of the Proposed System

Every data both texts and images required for input into this system must be

properly formatted. System Analysis and data preparation in this context means

manipulation of system information and data into a form suitable for further

analysis and processing. It is a process that involves many different tasks and

18
which cannot be fully automated. Many of the system analysis activities and

routine are tedious, and time consuming .It has been estimated that system analysis

accounts for 60% to 80% of the time spent on a data mining project. System

analysis is essential for successful proposed system design. Poor quality data

typically result in incorrect and unreliable data mining results. In preparation of the

data used in this project, it is done so that in the course of analyzing system from

different perspectives and summarizing it into useful information, it will be simpler

and easier. All data used in the course of this project are data that deals with

quality control methods. Meanwhile, it is important to also prepare users by

making them know the kind of data that is needed while using the new system.

They will be told where to input numeric values and where to input alphanumeric

values and so on. The users are also told the necessary information needed of them

whenever they come for transaction. If after preparing the data, and the users are

not prepared to, is as good as not doing any work.

2.11.1 Advantages of the Proposed System

The new system is expected to solve the problems of the old system. The

advantages of this new System include.

i. To maintain consistency in access mode at the information desk

ii. To reduce redundancy in information captured from the members for the

loan management scheme.

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iii. To protect member's privacy concerns.

iv. To increase correspondence among members

v. To calculate automatically and generate report easier and faster especially in

cases of limited time.

2.12 Related Reviews

Olorunlomerue et al. (2017) proposed a web-based cooperative information

management system for handling records of cooperative societies in Nigeria. The

authors used Java as the programming language and MySQL for building the

database. The approach used in the study was to develop a solution that can be

used for cooperative society registration. Thus, this solution can assist the

government in the collation of data on cooperative societies for planning.

Onyeama et al. (2017) developed a system that essentially manages both shortterm

and long-term loans, and keeps track of cash inflow and outflow of a cooperative

society among others. The proposed solution made us of SQL Server database

architecture at the back end with PHP, CSS and HTML at the front end. The

authors argued that interactions with operators and stakeholders and through

observation of records of activities aided the gathering of the required information.

Moreover, Yusuff, et al. (2015) carried out a study that investigated and appraised

the use of ICT for managing cooperative societies. The authors used some selected

tertiary institutions in Osun State for the appraisal. The work did not involve the

20
development of a Cooperative Management Solution for the societies selected.

Yebisi (2014) suggested various approaches through which the legal framework of

Nigerian Co-operative Societies Act, 2004 can be fully realized. The author

suggested how the wheel could be reinvented in order to make the principal

legislation responsive to the demands of modern cooperation. Furthermore,

Oluyombo (2013) investigated how loans made by co-operative societies in rural

areas meet the financial needs of their members and, by extension, the role of the

co-operative lending in rural finance. The study made use of primary data from

nine focus group discussions comprising seventy-two members selected randomly

from twelve co-operatives in six local government areas. Data was analyzed using

tables of numbers and percentages, content analysis and quotations from

participants. The study did not promote the development and deployment of ICT-

based solution for cooperative loan management.

Mbam et al. (2013) developed a cooperative management system that can aid a

cooperative society on loan management. The authors argued that the system

essentially manages both short-term and long-term loans, and keeps track of cash

inflow and outflow of a cooperative society among others. Authors used SQL

Server database architecture at the back end and Visual Basic.Net framework at the

front end. They argued that such approach makes the proposed solution to be

21
highly interactive. However, it was observed the work failed to identify a case

study in which the proposed system can be found operational.

22
CHAPTER THREE

SYSTEM ANALYSIS AND DESIGN

3.1 Introduction

In this chapter we will describe the method involved in the design of the system.

We will also analyze the present system, its inputs processing and outs. After

which we will give the modules involved in the design of the new system,

Justification for a proposed new system, and problem/limitation of the system.

3.2 Detailed definition of the problem

The manual method of disbursement of loans to clients and customers of KUDA

Bank Plc has played a good a good and reliable role in the bank but has been seen

a long run activity due to the large amount of files and forms to be filled and

needed documents from customers which would be used to complete the

registration and processing of loans. But due to the high increase in technology

usage currently, the development of a computerized Loan Management System

would be used to address the need for a robust, automated, and user-friendly

platform to manage loan-related activities and disbursement. By offering a holistic

solution, this system aims to revolutionize the loan management process and

contribute to the success of the KUDA Bank while providing borrowers with a

convenient and efficient experience.

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3.3 Method of data collection

This project was carried out by employing many methods involving the

computerized loan management system and bank loans administration. Several oral

interviews were mad with different sectors especially the staff and management of

Diamond bank in Owerri, invent computer Nigeria limited and federal banking

systems were also consulted. These researches include internet research, text books

and published material relevant to the subject matter.

In addition, the study of the existing system of loans management was carried out

and drawbacks such as time wastage, queue, data insecurity and efficiency, too

much of paper brainwork were identified, which was the need for this project. The

project was designed and coded with MVC (HTML, CSS, JAVASCRIT),

REACT.JS, MYSQL for database.

3.4 Review of the existing system/procedure

A modern loan management system should automate various processes like loan

application, approval, disbursement, and repayment tracking. If the existing system

lacks automation, it might hinder efficiency and customer satisfaction. The system

also provides a database to store loan-related data in various spreadsheets to

improve efficient decision making and reporting. Also the system structure and its

integration capabilities could significantly enhance operational efficiency,

24
customer experience, data security, and regulatory compliance. It's important to

consider these aspects while planning any upgrades or replacements to the existing

system.

Organizational chart

Board of directors

Bank managers

Operation Account Secretary/typist

Banking officers
Computer Messenger
operator

Clerk
Drive

Fig. 3.1 Flowchart of the Existing System

25
3.5 Research methodology

A methodology is usually a guideline system for solving a problem, with specific

components such as phases, tasks, methods, techniques and tools. It can be defined

also as follows:

The analysis of the principles of methods, rules, and postulates employed by a

discipline. The systematic study of methods that are, can be, or have been applied

within a discipline.

The branch of logic that deals with the general principles of the formation of

knowledge.

The adopted methodology in the proposed system is the structure system and

design methodology (SSADM). The SSADM enables project to be supported by

computer-based tools such as computer software engineering system.

SSADM establish a framework for good communication between

participants in a project for each stage, SSADM set out a series of techniques and

procedures and convections for recording and communication information

pertaining to both in textual and diagrammatic forms.

Materials/Tools

Html (hypertext markup language): this is a mark-up language used to create the

basis of the software. It is said to be the skeleton of the software. This also gives

instructions on how an instruction should appear.

26
CSS (cascading style sheet): This is a style sheet used to create attractive web

designs colors, images and fonts to improve the appearance of the system.

Javascript “Jquery” and “Ajax” this is a frontend scripting language used to

improve the user responsiveness of the system.

Php (hypertext preprocessor): this is a scripting language which will be used to

collect all conditions and arguments from the programmer, collects data, inputs and

outputs of the system

(MySQL).: this is the relational database of the system used to accept inputs from

the user, processes arguments and displays its equivalent out on the screen

XAMPP: this stands for ‘cross platform(x), Apache, MySql and Php’ is a free and

open source cross-platform web server solution stack package developed by

Apache Friends, consisting mainly of the Apache HTTP Server, MySQL database,

and interpreters for scripts written in the PHP and Perl programming languages.

REACT.JS: this is an open-source JavaScript framework and library developed by

facebook. It is used for developing interactive user interfaces and web applications

quickly and efficiently with significantly less code than you would with other

scripting languages.

3.6 3.5 Feasibility study

Preliminary investigation examines project feasibility; the likelihood the system

will be useful to the organization. The main objective of the feasibility study is to

27
test the Technical, Operational and Economical feasibility for adding new modules

and debugging old running system. All system is feasible if they are unlimited

resources and infinite time. There are aspects in the feasibility study portion of the

preliminary investigation: ·

 Technical Feasibility ·

 Operational Feasibility ·

 Economic Feasibility

3.6.1 Technical feasibility

The technical issue usually raised during the feasibility stage of the investigation

includes the following: ·

 Does the necessary technology exist to do what is suggested? ·

 Do the proposed equipment’s have the technical capacity to hold the data

required to use the new system? ·

 Will the proposed system provide adequate response to inquiries, regardless

of the number or location of users? ·

 Can the system be upgraded if developed? ·

 Are there technical guarantees of accuracy, reliability, ease of access and

data security?

28
Earlier no system existed to cater to the needs of ‘Secure Infrastructure

Implementation System’. The current system developed is technically feasible. It is

a web based user interface for audit workflow at NIC-CSD. Thus it provides an

easy access to the users. The database’s purpose is to create, establish and maintain

a workflow among various entities in order to facilitate all concerned users in their

various capacities or roles. Permission to the users would be granted based on the

roles specified. Therefore, it provides the technical guarantee of accuracy,

reliability and security. The software and hard requirements for the development of

this project are not many and are already available in-house at NIC or are available

as free as open source. The work for the project is done with the current equipment

and existing software technology. Necessary bandwidth exists for providing a fast

feedback to the users irrespective of the number of users using the system.

3.6.2 Operational feasibility

Proposed projects are beneficial only if they can be turned out into information

system. That will meet the organization’s operating requirements. Operational

feasibility aspects of the project are to be taken as an important part of the project

implementation. Some of the important issues raised are to test the operational

feasibility of a project includes the following: - · Is there sufficient support for

the management from the users? · Will the system be used and work properly

29
if it is being developed and implemented? · Will there be any resistance from

the user that will undermine the possible application benefits?

This system is targeted to be in accordance with the above-mentioned issues.

Beforehand, the management issues and user requirements have been taken into

consideration. So there is no question of resistance from the users that can

undermine the possible application benefits.

Feasibility Report - FILE SHARING MANAGEMENT SYSTEM

The well-planned design would ensure the optimal utilization of the computer

resources and would help in the improvement of performance status.

3.6.3 Economic feasibility

A system can be developed technically and that will be used if installed must still

be a good investment for the organization. In the economic feasibility, the

development cost in creating the system is evaluated against the ultimate benefit

derived from the new systems. Financial benefits must equal or exceed the costs.

The system is economically feasible. It does not require any addition hardware or

software. Since the interface for this system is developed using the existing

resources and technologies available at NIC. There is nominal expenditure and

economic feasibility for certain.

30
3.7 Justification of the new system

This project is aimed at overcoming the existing bottlenecks by developing

dedicated user friendly software for managing loans to the various customers.

The software tools employed in this application developed are VB, MS Access

database, which is the fastest web server. This implementation of banking solution

will lead to a reliable fast and user appealing solution robust enough to meet the

enterprise need.

3.8 Modularity

Several modules that work inter-related manner are used to achieve the final

processing of the solution.

The modules that make up of a loan management system are enumerated below

a) User Authentication module

b) Account module

c) Account type module

d) Bank transaction module

e) User manager module

f) Bank transaction module

g) System configuration.

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a. UserAuthentication module: the user authentication module is

responsible and serves as the gate keeper of the whole application

because before the user gain accesses to the application he/she will be

authenticated so as to determine whether such a user is a valid user.

After authentication has been completed the module also serves as

role checker that is it determine the appropriate role attached to each

user and their corresponding privileges.

b. Account type module: this module is equipped to create and

configure different account types, because the account type created

during the creation of the main bank account, account type is

categorized all account also enable easy accessibility and management

of all bank accounts.

c. Account module: this is the most important module of the entire

module in the banking application, it serves as a whole entity or

container that identifies each and every customer in bank, all

transaction is taken place using the account.

d. Bank charges module: this is the entity that housed all the

corresponding bank charge in form of COTs and banking overdraft.

This module can stand alone but solely depend on bank accounts

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because each and every charge will be attached to different account so

as to give easy management.

e. User management modules: user management module is very

complex and logical module that is responsible for the creation of

user, editing the creation user profile, it is also extended to delete the

existing user from the bank database, its capability is also extended to

assign roles and privileges to the software user and it can only be

accessed by the bank or system administrator.

f. System configuration module: this is the top most administrator

console responsible for total management of the whole application

configuration such as the software data format, system memory

allocation, concurrency configuration, and report format and aligning.

3.9 Main menu specification

The system specification includes the logical and physical aspect of the loan

management system that runs concurrently for optimal performance of the

software. This includes the software, hardware and storage requirement.

3.9.1 Input specification

The application is designed in such a way that it gets input about the user directly

from the keyboard. The input requirement form is user statistics, Account Number,

33
Account type, active, password. This information will be required before a loan

will be granted to a client.

3.9.2Output specification

The output as any other system will be result of the processing done on the input.

The out form includes Account Number, Balance Loan status, and Account type.

3.10 System design

This converts the design and the implementation of web forms or input forms

where the system accept input from the user and also a report shows the processed

data, database design and software algorithms.

3.11System security consideration

Due to web base nature of the entire application the solution database layer is

accede by the application through secured server layer (SSL) which is designed

and implanted under strong security algorithm. Another system security

consideration taken is the use of web service for data access across the network so

as to reduce the effect of viruses, Trojan and other malicious users like system

hacker, because service seed the client with text based data not binaries, the

elimination of data, high make it not possible for any executable files or folder to

cross the wire to the bank application.

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3.12 Overview of the proposed system flowchart

Request mode

Loan request

Account transaction
history

Loan request New loan account


rejected credited

Bank account
Invalid request if request meet credited

Fig 3.2 Request mode flowchart

The chart above represent a request for loan, after a request has been made, the

loan processing engine, analyzes the person’s account to check if the person is on

loan, if the account is on loan the loan request will be terminated else it goes

35
further to check the transaction history of the account, if all the parameters are

meet the loan will be granted.

Since the loan is not a physical entity the account will be credited with the request

amount simultaneously a loan account will be opened with a debited balance.

Payment mode

Start payment

Is account balance greater than


monthly repayment?

Cancel payment Debt from the


account

Credit loan

Fig 3.2: Payment mode flowchart

36
From the chart above the engine put all account in array checks their status if the

account status is on loan the computation starts.

The procedures are as follows

1) The account balance is compared with the loan, repayment fee.

2) The loan account will be retrieved, the amount borrowed, rate and time will

be retrieved and they will be computed by the monthly repayment fees.

3) If the account balance is greater than monthly reduction fees, the account

balance debited and the loan balance will be credited.

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CHAPTER FOUR

SYSTEM IMPLEMENTATION AND RESULTS

4.1 Introduction

Implementation is a process carried out to make changes on the tested programs

developed in the system. Implementation is a process of testing systems in order to

make correction if there are errors. The testing of a newly developed system is an

important implementation activity program testing usually proceeds from higher to

lower levels of program module until the entire program is tested as a unit.

4.1 Computer hardware platform

Computer hardware platform is a specific configuration of hardware, a specific

operating system, or other software that is a standard for the development and

operation of computerized device such as personal digital assistance and cell phone

In loan management hardware platform can be described with a chart below

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Main server Data centre sever Backup/storage

Client SMS gateway

Main server: The main server is the computer that supply services to other machine

on a local area network (LAN) or a wide area network (WAN) such as the internet.

The server run the administrative software that manages user privilege and access

control. The main server is also powered with software like Apache web server

which is responsible for the listing.

HTTP request and also responding inform of data such as file, multimedia

documents and stream lining.

The main configuration is illustrated below

Ram: 4.00gigabyte

Processor: the processor should be Intel Tritium 2-core, 2.00GHZ.

Hard-disk space 250 gigabyte to 500 gigabyte of hard disk space.

39
USB Port: The USB 2.0 with minimum of six ports.

DVD Rom/writer

CD-Rom: pioneer, DVD-RW DVR-WBA

Display: 1280 * 800*60 hertz

Data centre server: data server is the machine that is housing the main database of

the loan management system. The database server is a network relational database

such as MS Access, this capability enable the main server to communicate with the

data centre server through Visual Basic with the help of a very secure interface

called web services.

The data centre server powered the main database which is MS Access database

for easy accessibility and deployment and it is easy to follow rules of Intel

architecture.

Back up server: The backup is responsible for the business of continuity of the

main application or insurance of the main application.

The backup is responsible for maintaining the duplicate copy of the data on the

data centre server, for data recovery during hardware error, system crash or any

physical disaster.

The data base server automatically communicates with the backup copies of data

files, maintaining both the current version and preceding version on disk.

40
4.2 Software platform

Operating system: the operating system is the basic software that controls a

computer. It has three major functions.

 Coordination and manipulate computer hardware such as

 Computer memory

 Printer

 Disk

 Keyboard

 Mouse

 Monitor

 It organizes files on variety of storage media such as floppy disk, hard drive

and compact disk and so on.

 It manages hardware error and loss data.

The recommended operating system for this project is windows operating system.

They are recommended because of the support virtualization, multi- tasking and

they are also network operating system and very user friendly.

Database management system: The DBMS used is called MYSQL; it is a relational

database management system. The program runs as a server providing multi user

access to a number of data base.

41
MYSQ (My Sequential Querry Language) is often been used in the enterprise

software project which require a full featured database management system. It also

used a very such a time that the new system. It also used a scale world wide web

product.

4.2.1 Compiler/ Translator

In computer science, computer program that translate source code instruction in a

program written by a software engineer into an object code, those instructions

written in a language the computer central processing unit that can read and

interprets I.I.S servers as a computer. ASP is a write code and interpreted with

computer written c programming language. ASP is very fast due to the

background.

4.3 Program testing

After the software has been deployed on the server, the dummy account was

created with AccountNumber 2009420898 and every necessary parameter like

AccountName, AcountNumber or CustomerName, Gender and phoneNumber an

so on are submitted to the main server, the respond time was 5 seconds to complete

a single transaction. The different in speed was due to ASP server used by

Diamond. At the transaction point for an example loan creation module, deposit

module, withdrawal out such as a loan of #100000 is issued to 2009420898 under

42
the interest rate of 25% with period of 30 days; the following statistical data was

generated and are listed below.

4.3.1 System flowchart

KEYING OF LOAN
(KEYBOARD) DATA BASE FILE
(DISK)

Processing of data

( CPU)

PRINTING OF THE OUTPUI


DISPLAY INPUTS (PRINTER)

FROM KEYBOARD
(VDU)

43
4.4 Program flowchart

Loan Request Flowchart

Start

Is account Terminate
on loan?

YES

Is Terminate
transaction
parameter
meet
NO

Open loan
account

NO
Credit account

END

YES

44
Loan Repayment Flowchart

Start

Is
Terminate
account
on loan?

NO

Extract rate, balance time


from loan account

Compute monthly
repayment fees

Is account
Terminate
balance
greater than
monthly
repayment?

Debit bank account

Credit loan account

Stop

45
4.5 System maintenance

System maintenance ensures that the system runs promptly by eliminating the

smallest error suspected. This section, thus propose measures to be adopted.

1) Proper handling of the system unit. This entails booting,

rebooting and shutting down the system properly to prevent

file corruption.

2) Scanning the hard disk and floppy disk in use regularly to

avoid infection by viruses.

3) Regular service of the computer hardware to avoid sudden

breakdown of the computer.

4) Important files of the new system should be backed up

regularly to avert permanent loose of data due to hard disk

failure.

4.6 System requirement

Hardware requirement

 Desktop computer or personal computer at the user end.

 The server computer which serves as back end with a configuration up to 4

megabyte of ram.

 Storage disk of 250 – 500 gigabytes

 Internet Access

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 Router

 Printer

 UPS

 Stabilizer

SOFTWARE REQURIMENT

 MVC (HTML, CSS, JAVASCRIPT, REACT.JS)

 MYSQL & PHP (DATABASE)

4.7 Change over

There are different methods of conversation of a manually operated system to a

computer operated system. The different methods are mention below

 Dual Approach

This method requires that the existing system gradually put in place. It is more

or less a gradual change over and not an immediate conversion

 INVENTORY APPROACH

This method requires a computer, on time change – over from the existing

system to the new system. It can also be said to be an end to the old system

immediately.

 PARARREL APPROACH

47
This method requires the simultaneous operation of both the existing and the

new system until such a time that the new system is actually producing result.

 Pilot Approach

This method requires that a small portion of the new system be implemented

and evaluated (by any of the pre- defined change- over approaches) while the

major portion of the work load continues to be processed via the existing

system. If the implementation of the entire system can be converted. This

method is also a gradual change –over.

The best change over approach for the proposed system for its effective use is

a parallel “approach” Reason being that the new system need proper

familiarization by user and it is likely that they do not know much about

computer system.

4.8 Documentation

Documentation is the formalized record of detailed analysis and designed of

the new system. It is outlines the techniques and methods used to correct

problem area of the existing system. All stages in a system require

documentation, which constitutes a link between one activity of the new

system and the others.

Existence of a documentation standard would make communication between

the system analysis and system user in particular easier. It will also make

48
development of a new system easier and quicker since the documentation

standard would give lines to be followed by the developer. The content of the

documentation manual also include hardware specification and program flow

chart.

49
CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary

The flex cube used by the KUDA bank is cumbersome and not user friendly with

very low execution time. The modularization of the whole application gives easy

usability and fast access time which also leads to increase in the throughput of the

entire solution. The loan module is highly optimized to manage the loan effectively

and easy of generating loan report that can be exported to any document format.

The security gap is well bridged so as to reduce the security loop of the existing

application, by the implementation of web services under secure server layer

(SSL), that generate fight secure and encrypting algorithm. The advantages of

computerized loan management system over the manual system can never be

emphasized. The system eliminates cost, time wastage, inaccuracy, inefficiency,

fatigue, over-employment and fraud.

5.2 Conclusion

Flex cube is the present system used by Diamond bank and it has been serving, but

not quite well designed because of the throughput, sometimes you go to banking

arena, there will be large queue or crowed this is due to the software performance
50
is very slow execution and high downtime. The design of the software is one thing

and maintenance is another thing.

Adequate care should be taken by both staff and management to ensure that the

new system is well maintained.

Computer promotes every area of human endeavor. Its impact in computer based

loan management system is much to write home about. I therefore conclude by

saying, long live computer, long live computer scientists and long live computer

programmers.

5.3Recommendation

This great research is recommended to individuals who are involved in one

business transaction or the other. That they continue to fulfill their motives by

making profits through computer based loan management system.

I recommend that this project work be examined by the Diamond bank and put the

research into practical work. Also the application found in this project is being

extended to other banks.

Thus, there are still features, which could be added to the software. These

constitute area of futures development for student who intends to work on same

research work in feature.

51
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