Loan provisioning criteria

Open Loan provisioning criteria from Organization (or press Ctrl+K and type "provisioning criteria"). You need READ_PROVISIONINGCRITERIA to see the list, plus create, update, or delete permission for those actions.

Criteria define how much to reserve and which GL accounts to use for each overdue-day band. Provisioning entries need at least one criteria before Fineract will calculate reserves. For the full picture — loans, chart of accounts, entries, and journals — see Loan-loss provisioning.

Prerequisites

• Loan products must exist. Each criteria binds one or more products; only loans on those products are included in provisioning runs.
• Chart of accounts needs detail GL accounts:
  • Liability accounts (type Liability) for the balance-sheet provision.
  • Expense accounts (type Expense) for the reserve charge. These are not the fund source, loan portfolio, or income accounts on loan product accounting.

Fineract supplies provisioning categories (for example STANDARD, SUB-STANDARD, DOUBTFUL, LOSS) from GET /provisioningcriteria/template. You cannot add or rename categories in Bankayo — you configure each one inside the criteria.

The list

• Search by criteria name or who created it.
• New criteria opens the create wizard.
• Click a row to edit (single-page form, not the wizard).
• Delete (row menu) asks for confirmation. Fineract refuses criteria still referenced by a provisioning entry.

The address bar is Organization › Loan provisioning criteria.

Creating criteria (wizard)

New criteria at /organization/loan-provisioning-criteria/new walks through:

Setup

• Name — up to 100 characters.
• Loan products — pick every product this criteria should cover (at least one).

One step per category

Fineract categories appear in template order. On each step:

• Min age — overdue days at the start of the band.
  • The first category (usually STANDARD): you enter min age; it typically starts at 0.
  • Later categories: min age is automatic — one day after the previous category’s max age. Bands must be contiguous (no gaps, no overlaps).
• Max age — last overdue day in this band (required).
• Reserve % — provisioning percentage from 0 to 100.
• Liability GL — liability detail account from the chart.
• Expense GL — expense detail account from the chart.

The stepper marks steps with validation issues after you try to reach Review or Create, so you can jump back without visiting every step.

Review

Confirm name, products, and every category band before Create criteria.

Editing criteria

Click a row to open /organization/loan-provisioning-criteria/[id]/edit.

The edit form shows all categories in one table with the same fields. Min age on the first row is editable; later rows show the derived min age. Changing a max age updates the next row’s min age automatically.

Save when you adjust bands, percentages, products, or GL accounts. If criteria already fed an unposted provisioning entry, use Recreate lines on that entry after you save.

Age bands (contiguous)

Provisioning categories are ordered. If STANDARD ends at day 30, SUB-STANDARD starts at day 31, not 32 or 30.

Reserve percentages often increase as delinquency worsens (for example 2% → 20% → 100%). Fineract validates overlap at the engine level; Bankayo also enforces contiguity in the form.

GL account rules

• Liability GL pickers list liability detail accounts only.
• Expense GL pickers list expense detail accounts only.
• Options come from the provisioning template first; if empty, Bankayo loads eligible accounts from the chart (manual entries allowed, not disabled, detail usage).

Each category can use different accounts. Many institutions reuse the same pair across bands for simplicity.

What happens after you save

Fineract stores the criteria. On the next provisioning entry for a date, the engine:

1. Considers loans on the bound products.
2. Matches each loan’s overdue days to a category band.
3. Applies the reserve percentage and GL mapping from that band.

You do not pick a criteria on the entry screen — Fineract uses all configured criteria.

Permissions

Related help

• Loan-loss provisioning — ecosystem overview and setup order.
• Provisioning entries — run provisioning and post journals.
• Chart of accounts — create liability and expense accounts.
• Journal entries — ledger after posting.