Glossary
Microfinance and core banking terms
Plain-English definitions, each linked to the solution where it applies.
A
- Account block
- A restriction on an account that stops debits, credits or both until lifted.
- Ajo / Esusu
- Traditional Nigerian daily or periodic contribution schemes, collected by an agent and returned or rotated among members.
- Amortisation schedule
- The table of instalments for a loan, showing the principal and interest in each and the balance after it.
B
- Backdating window
- An administrator-controlled range of past dates into which staff may post, so that yesterday's work can be caught up without misdating transactions.
- Bank reconciliation
- Matching the institution's GL bank account against the bank statement to find and explain differences.
- BVN
- Bank Verification Number: the biometric identifier issued to Nigerian bank customers, used to verify identity at onboarding.
C
- Chart of accounts
- The structured list of general ledger accounts, grouped into assets, liabilities, equity, income and expenses.
- Contribution plan
- A savings, shares, welfare or thrift plan with a fixed frequency and optional target, common in cooperatives and daily-contribution schemes.
- Core banking system
- The software that keeps an institution's customer accounts, transactions and general ledger and processes its daily operations.
- Credit bureau
- An agency that holds borrowers' credit histories; lenders check it before approving a loan.
D
- Direct-debit mandate
- A customer's standing authorisation for the lender to charge instalments from their card or bank account automatically.
- Double-entry
- The accounting rule that every transaction is recorded as equal debits and credits, so the books always balance.
E
- Entry date
- The real system timestamp when a transaction was posted or approved. Kept for audit; never editable.
F
- Fixed deposit
- A deposit placed for a fixed term at an agreed interest rate, paid out or rolled over at maturity.
- Flat-rate interest
- Interest computed on the original principal for the whole tenure, regardless of repayments made.
G
- General ledger (GL)
- The institution's complete set of accounts from which the trial balance, balance sheet and profit and loss are produced.
I
- Idempotency key
- A unique token sent with a request so that a retry of the same request is recognised and not processed twice.
K
- KYC
- Know Your Customer: the identity verification and record-keeping an institution performs before and during a customer relationship.
M
- Maker-checker
- A control in which the person who prepares a transaction (the maker) cannot also approve it; a different officer (the checker) must review and approve before it...
- Microfinance institution (MFI)
- An institution providing savings, loans and other financial services to low-income customers and small businesses, including CBN-licensed microfinance banks.
- Multi-credit batch
- One debit and many credits posted as a single approved batch, such as salaries or bulk disbursements.
- Multi-debit batch
- Many debits and one credit posted as a single approved batch, such as bulk deductions.
N
- NIN
- National Identification Number issued by NIMC, used as an identity check during KYC.
O
- Overdraft limit
- The amount by which a customer is allowed to draw an account below zero.
P
- Period closure
- Locking an accounting period so that no further postings can be made into it by any user.
R
- Reducing-balance interest
- Interest computed on the outstanding principal, so the interest portion falls as the loan is repaid.
- Reversal
- A new balanced entry that cancels a previous posting while keeping the original on record.
S
- Standing order
- An instruction to move a fixed amount between accounts at a regular interval.
T
- Till
- A teller's cash drawer, tracked as a cash account so that every cash movement is accounted for.
- Trial balance
- A list of every general ledger account with its debit or credit balance; the totals must agree if the books are balanced.
V
- Value date
- The business date a transaction is effective for, which drives statements and the accounting period. Distinct from the entry date, the timestamp when it was phy...
- Vault
- The branch's main cash holding, from which tills are funded and to which they are emptied.