Co-Lending
Co-Lending is a lending model where two or more lenders jointly provide credit to borrowers by sharing the loan amount, risks, and returns. In this arrangement, one lender can leverage the funding capacity of another lender while benefiting from their market reach and lending expertise.
Frappe Lending supports co-lending operations by allowing users to configure and manage co-lenders through the Loan Partner document. The system helps track partner-wise loan participation, repayment schedules, and accounting entries.
Did You Know?
Co-lending enables lenders to share loan exposure while expanding credit availability for borrowers through collaborative lending arrangements.
Accessing Loan Partner
Co-lending partners can be managed from the Loan Partner section in Frappe Lending.
Home > Lending > Co-Lending > Loan PartnerCreating a Loan Partner
Follow these steps to create a co-lending partner record:
- Open the Loan Partner list.
- Click on Add Loan Partner.
- Enter the required partner details:
- Partner Code
- Partner Name
- Partner Loan Share Percentage
- Repayment Schedule Type
- Save the Loan Partner record.
Loan Partner Details
| Field | Description |
|---|---|
| Partner Code | A unique identifier used to reference the co-lending partner. |
| Partner Name | The name of the lender participating in the co-lending arrangement. |
| Partner Loan Share Percentage | Defines the percentage of the loan amount contributed by the co-lender. |
| Repayment Schedule Type | Determines the repayment schedule structure used for the co-lender share. |
Co-Lender Repayment Schedule
Once a Loan Partner is linked to a loan, Frappe Lending creates a separate co-lender repayment schedule during loan disbursement.
The system maintains:
- Borrower repayment schedule.
- Co-lender repayment schedule.
- Partner-specific loan share tracking.
This allows lenders to monitor repayment obligations and collections based on each participant’s share in the loan.
Note
The co-lender schedule is generated along with the borrower repayment schedule when the loan is disbursed.
Co-Lender Accounting
During loan disbursement and repayment transactions, Frappe Lending automatically posts accounting entries for amounts payable to the co-lender.
| Transaction | Accounting Impact |
|---|---|
| Loan Disbursement | Records accounting entries related to the co-lender’s share in the disbursed loan amount. |
| Loan Repayment | Tracks amounts collected and payable to the co-lender based on their participation share. |
Co-Lending Process Flow
- Create and configure the Loan Partner.
- Assign the co-lender partner to the loan.
- Disburse the loan amount.
- System creates borrower and co-lender repayment schedules.
- Accounting entries are generated for co-lender-related transactions.
Best Practices
- Configure accurate loan share percentages for each co-lender.
- Verify repayment schedule settings before loan disbursement.
- Maintain updated Loan Partner records for accurate accounting.
- Review co-lender accounting entries during disbursement and repayment cycles.
