Coupled or separated: how a cooperative treats savings and loan accounts
Societies differ on whether loan repayments come out of a member's savings. KoopManager supports both: a coupled model that deducts repayments from savings, and a separated model that keeps savings and loans independent.
The problem: the software and the society follow different rules
Some societies treat a member's loan as a charge against their savings, and others keep the two apart. When the books, the software and the members' understanding follow different rules, balances look wrong and every dispute starts with arguing about which rule applies.
Who feels it
- Members cannot tell whether a repayment reduced their savings or their loan.
- Officers apply the rule differently from month to month, especially when contributions arrive in bulk.
How KoopManager resolves it
Each society chooses its model. Under the coupled model, loan repayments are deducted from the member's savings. Under the separated model, savings and loan accounts stay independent, and the society decides whether a bulk contribution goes to savings first or to loan repayment first.
The choice should follow your bye-laws and be agreed by the Exco before going live, because changing it later changes how existing balances behave.
Related guides
- How to move a cooperative society from spreadsheets to software
- Cooperative loan guarantees explained
- How cooperative loans are approved and repaid
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