diff --git a/.example.env b/.example.env
new file mode 100644
index 0000000..4878aad
--- /dev/null
+++ b/.example.env
@@ -0,0 +1,21 @@
+VALID_APP_ID=**********
+VALID_API_KEY=*************
+BASIC_AUTH_USERNAME=******
+BASIC_AUTH_PASSWORD=******
+
+
+SWAGGER_URL="/documentation"
+API_URL="/swagger.json"
+
+
+
+DATABASE_USER=*****
+DATABASE_PASSWORD=*****
+DATABASE_HOST=******
+DATABASE_PORT=******
+DATABASE_NAME=*****
+
+# Flask Configuration
+FLASK_APP=wsgi.py
+FLASK_ENV=development
+APP_PORT=4500
diff --git a/Dockerfile b/Dockerfile
index fa0ff11..0bc8e59 100644
--- a/Dockerfile
+++ b/Dockerfile
@@ -17,5 +17,6 @@ EXPOSE 5000
 ENV FLASK_APP=app.py
 ENV FLASK_RUN_HOST=0.0.0.0
 
-# Run the application
-CMD ["gunicorn", "-w", "4", "-b", "0.0.0.0:5000", "wsgi:wsgi_app"]
\ No newline at end of file
+RUN chmod +x scripts/entrypoint.sh
+
+ENTRYPOINT ["scripts/entrypoint.sh"]
\ No newline at end of file
diff --git a/README.md b/README.md
index 7911c12..76963e2 100644
--- a/README.md
+++ b/README.md
@@ -20,25 +20,39 @@ cd repository
 ```
 
 
-### 2. Create a `.env` File
+### 2. Configure Environment Variables
 
-Before running the application, create a `.env` file in the root directory and add the required environment variables:
+Instead of creating a new `.env` file, rename the provided `.env.example` file and update the necessary variables:
 
 ```bash
-touch .env
+cp .env.example .env
 ```
 
-Then, open the `.env` file and add the following:
+Then, open the `.env` file and **update the following variables with your actual configuration:**
 
-```ini
-# Environment Variables
-BASIC_AUTH_USERNAME=user
-BASIC_AUTH_PASSWORD=password
-SWAGGER_URL="/documentation"
-API_URL="/swagger.json"
+- Database credentials:
+  ```ini
+  DATABASE_USER=your_database_username
+  DATABASE_PASSWORD=your_database_password
+  DATABASE_NAME=your_database_name
+  DATABASE_PORT=5432
+  ```
+- App ID and API Key:
+  ```ini
+  APP_ID=your_app_id
+  API_KEY=your_api_key
+  ```
+
+This ensures that the application is properly configured with your environment variables.
+
+> **Optional:** Change file permissions for the entrypoint script
+
+```bash
+chmod +x scripts/entrypoint.sh
 ```
 
-This ensures that the application uses secure API keys and app IDs.
+---
+
 
 ### 3. Run the Application with Docker Compose
 
diff --git a/app/__init__.py b/app/__init__.py
index e7b7836..2a8d34d 100644
--- a/app/__init__.py
+++ b/app/__init__.py
@@ -5,6 +5,11 @@ from flask_cors import CORS
 from app.config import Config
 from app.api.routes import api
 from app.errors import register_error_handlers
+from flask_sqlalchemy import SQLAlchemy
+from flask_migrate import Migrate
+
+db = SQLAlchemy()
+migrate = Migrate()
 
 def create_app():
     """ Factory function to create a Flask app instance """
@@ -31,7 +36,21 @@ def create_app():
     # Error Handlers
     register_error_handlers(app)
 
-   
+    import logging
+    from sqlalchemy import create_engine
+
+    # Set up logging
+    logging.basicConfig(level=logging.INFO)
+    logger = logging.getLogger(__name__)
+
+    # Log the database URI
+    logger.info(f"Database URI: {app.config['SQLALCHEMY_DATABASE_URI']}")
+
+    # Database and Migrations
+    db.init_app(app)
+    
+    
+    migrate.init_app(app, db)
    
 
     return app
diff --git a/app/api/services/account_service.py b/app/api/services/account_service.py
new file mode 100644
index 0000000..a452b17
--- /dev/null
+++ b/app/api/services/account_service.py
@@ -0,0 +1,15 @@
+from app.models import Account
+
+def check_account_settings(account_id, customer_id):
+    """
+    Checks if the account belongs to the customer and if it has existing liens.
+    """
+    account = Account.query.filter_by(id=account_id, customer_id=customer_id).first()
+
+    if not account:
+        return False, "Account not found or doesn't belong to customer"
+
+    if account.lien_amount > 0:
+        return False, "Account has an existing lien"
+
+    return True, "Account is valid"
\ No newline at end of file
diff --git a/app/api/services/customer_service.py b/app/api/services/customer_service.py
new file mode 100644
index 0000000..582aa1e
--- /dev/null
+++ b/app/api/services/customer_service.py
@@ -0,0 +1,7 @@
+from app.models import Customer
+
+def check_customer_eligibility(data):
+    # Verify customer exists
+    customer = Customer.query.filter_by(id=data['customerId']).first()
+    if not customer:
+        return False, "Customer not found"
\ No newline at end of file
diff --git a/app/api/services/loan_service.py b/app/api/services/loan_service.py
new file mode 100644
index 0000000..3beb98c
--- /dev/null
+++ b/app/api/services/loan_service.py
@@ -0,0 +1,10 @@
+
+from app.models import Loan
+
+def check_active_loans(data):
+    active_loans = Loan.query.filter_by(
+            customer_id=data['customerId'],
+            status='active'
+        ).count()
+    if active_loans > 0:
+        return False, "Customer has active loans"
\ No newline at end of file
diff --git a/app/config.py b/app/config.py
index 9d37a22..e237b8c 100644
--- a/app/config.py
+++ b/app/config.py
@@ -14,4 +14,16 @@ class Config:
     VALID_APP_ID = os.getenv("VALID_APP_ID", "app1")
     VALID_API_KEY = os.getenv("VALID_API_KEY", "test-api-key-12345")
     BASIC_AUTH_USERNAME  = os.environ.get("BASIC_AUTH_USERNAME", "user")
-    BASIC_AUTH_PASSWORD = os.environ.get("BASIC_AUTH_PASSWORD", "password")
\ No newline at end of file
+    BASIC_AUTH_PASSWORD = os.environ.get("BASIC_AUTH_PASSWORD", "password")
+
+    DATABASE_USER = os.environ.get("DATABASE_USER")
+    DATABASE_PASSWORD = os.environ.get("DATABASE_PASSWORD")
+    DATABASE_HOST = os.environ.get("DATABASE_HOST")
+    DATABASE_PORT = os.environ.get("DATABASE_PORT", 10532)
+    DATABASE_NAME = os.environ.get("DATABASE_NAME")
+
+    SQLALCHEMY_DATABASE_URI = (
+        # f"postgresql+psycopg2://{DATABASE_USER}:{DATABASE_PASSWORD}@{DATABASE_HOST}:{DATABASE_PORT}/{DATABASE_NAME}"
+        f"postgresql+psycopg2://{DATABASE_USER}:{DATABASE_PASSWORD}@{DATABASE_HOST}:{DATABASE_PORT}/{DATABASE_NAME}?options=-csearch_path%3Dflask_app"
+    )
+    SQLALCHEMY_TRACK_MODIFICATIONS = False
\ No newline at end of file
diff --git a/app/models/__init__.py b/app/models/__init__.py
new file mode 100644
index 0000000..8fd1277
--- /dev/null
+++ b/app/models/__init__.py
@@ -0,0 +1,6 @@
+from .customer import Customer
+from .account import Account
+from .loan import Loan
+from .transaction import Transaction
+
+__all__ = ['Customer', 'Account', 'Loan', 'Transaction']
\ No newline at end of file
diff --git a/app/models/account.py b/app/models/account.py
new file mode 100644
index 0000000..0b11842
--- /dev/null
+++ b/app/models/account.py
@@ -0,0 +1,15 @@
+from datetime import datetime
+from app import db
+
+class Account(db.Model):
+    id = db.Column(db.String(50), primary_key=True)  
+    customer_id = db.Column(db.String(50), db.ForeignKey('customer.id'), nullable=False)
+    account_type = db.Column(db.String(50))
+    status = db.Column(db.String(20), default='active')
+    lien_amount = db.Column(db.Float, default=0.0)
+    created_at = db.Column(db.DateTime, default=datetime.utcnow)
+    updated_at = db.Column(db.DateTime, default=datetime.utcnow, onupdate=datetime.utcnow)
+
+    def __repr__(self):
+        return f'<Account {self.id}>'
+    
\ No newline at end of file
diff --git a/app/models/customer.py b/app/models/customer.py
new file mode 100644
index 0000000..eb83fb3
--- /dev/null
+++ b/app/models/customer.py
@@ -0,0 +1,12 @@
+from datetime import datetime
+from app import db
+
+class Customer(db.Model):
+    id = db.Column(db.String(50), primary_key=True) 
+    msisdn = db.Column(db.String(20), unique=True, nullable=False)
+    country_code = db.Column(db.String(3), nullable=False)
+    created_at = db.Column(db.DateTime, default=datetime.utcnow)
+    updated_at = db.Column(db.DateTime, default=datetime.utcnow, onupdate=datetime.utcnow)
+
+    def __repr__(self):
+        return f'<Customer {self.id}>'
\ No newline at end of file
diff --git a/app/models/loan.py b/app/models/loan.py
new file mode 100644
index 0000000..4774508
--- /dev/null
+++ b/app/models/loan.py
@@ -0,0 +1,16 @@
+from datetime import datetime
+from app import db
+
+
+class Loan(db.Model):
+    id = db.Column(db.String(50), primary_key=True) 
+    customer_id = db.Column(db.String(50), db.ForeignKey('customer.id'), nullable=False)
+    account_id = db.Column(db.String(50), db.ForeignKey('account.id'), nullable=False)
+    product_id = db.Column(db.String(20), nullable=False)
+    principal_amount = db.Column(db.Float, nullable=False)
+    status = db.Column(db.String(20), default='pending')
+    created_at = db.Column(db.DateTime, default=datetime.utcnow)
+    updated_at = db.Column(db.DateTime, default=datetime.utcnow, onupdate=datetime.utcnow)
+
+    def __repr__(self):
+        return f'<Loan {self.id}>'
\ No newline at end of file
diff --git a/app/models/offer.py b/app/models/offer.py
new file mode 100644
index 0000000..75dac3d
--- /dev/null
+++ b/app/models/offer.py
@@ -0,0 +1,12 @@
+from datetime import datetime
+from app import db
+
+class Offer(db.Model):
+    id = db.Column(db.Integer, primary_key=True)
+    amount = db.Column(db.Float, nullable=False)
+    interest_rate = db.Column(db.Float, nullable=False)
+    created_at = db.Column(db.DateTime, default=datetime.utcnow)
+    updated_at = db.Column(db.DateTime, default=datetime.utcnow, onupdate=datetime.utcnow)
+
+    def __repr__(self):
+        return f'<LoanOffer {self.id}>'
\ No newline at end of file
diff --git a/app/models/transaction.py b/app/models/transaction.py
new file mode 100644
index 0000000..1a1cfd3
--- /dev/null
+++ b/app/models/transaction.py
@@ -0,0 +1,14 @@
+from datetime import datetime
+from app import db
+
+class Transaction(db.Model):
+    id = db.Column(db.String(50), primary_key=True)
+    account_id = db.Column(db.String(50), db.ForeignKey('account.id'), nullable=False)
+    type = db.Column(db.String(50), nullable=False)
+    amount = db.Column(db.Float, nullable=False)
+    status = db.Column(db.String(20), default='pending')
+    created_at = db.Column(db.DateTime, default=datetime.utcnow)
+    updated_at = db.Column(db.DateTime, default=datetime.utcnow, onupdate=datetime.utcnow)
+
+    def __repr__(self):
+        return f'<Transaction {self.id}>'
\ No newline at end of file
diff --git a/docker-compose.yml b/docker-compose.yml
index e3765f2..80445eb 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -1,11 +1,36 @@
+version: '3.8'
+
 services:
-  digifi-flaska002:
+  db:
+    image: postgres:13
+    environment:
+      - POSTGRES_USER=${DATABASE_USER}
+      - POSTGRES_PASSWORD=${DATABASE_PASSWORD}
+      - POSTGRES_DB=${DATABASE_NAME}
+    ports:
+      - "${DATABASE_PORT}:${DATABASE_PORT}"
+    volumes:
+      - postgres_data:/var/lib/postgresql/data
+    healthcheck:
+      test: ["CMD-SHELL", "pg_isready -U ${DATABASE_USER} -d ${DATABASE_NAME}"]
+      interval: 5s
+      timeout: 5s
+      retries: 5
+
+  digifi-bank-to-product-core:
     build: .
     ports:
-      - "4500:5000"
+      - "${APP_PORT:-4500}:5000"
     environment:
-      - FLASK_APP=app.py
-      - FLASK_RUN_HOST=0.0.0.0
+      - FLASK_APP=wsgi.py
+      - FLASK_ENV=development
+      - DATABASE_URL=postgresql+psycopg2://${DATABASE_USER}:${DATABASE_PASSWORD}@db:${DATABASE_PORT}/${DATABASE_NAME}?options=-csearch_path%3Dflask_app
     volumes:
       - .:/app
+    depends_on:
+      db:
+        condition: service_healthy
     restart: always
+
+volumes:
+  postgres_data:
\ No newline at end of file
diff --git a/migrations/README b/migrations/README
new file mode 100644
index 0000000..0e04844
--- /dev/null
+++ b/migrations/README
@@ -0,0 +1 @@
+Single-database configuration for Flask.
diff --git a/migrations/alembic.ini b/migrations/alembic.ini
new file mode 100644
index 0000000..ec9d45c
--- /dev/null
+++ b/migrations/alembic.ini
@@ -0,0 +1,50 @@
+# A generic, single database configuration.
+
+[alembic]
+# template used to generate migration files
+# file_template = %%(rev)s_%%(slug)s
+
+# set to 'true' to run the environment during
+# the 'revision' command, regardless of autogenerate
+# revision_environment = false
+
+
+# Logging configuration
+[loggers]
+keys = root,sqlalchemy,alembic,flask_migrate
+
+[handlers]
+keys = console
+
+[formatters]
+keys = generic
+
+[logger_root]
+level = WARN
+handlers = console
+qualname =
+
+[logger_sqlalchemy]
+level = WARN
+handlers =
+qualname = sqlalchemy.engine
+
+[logger_alembic]
+level = INFO
+handlers =
+qualname = alembic
+
+[logger_flask_migrate]
+level = INFO
+handlers =
+qualname = flask_migrate
+
+[handler_console]
+class = StreamHandler
+args = (sys.stderr,)
+level = NOTSET
+formatter = generic
+
+[formatter_generic]
+format = %(levelname)-5.5s [%(name)s] %(message)s
+datefmt = %H:%M:%S
diff --git a/migrations/env.py b/migrations/env.py
new file mode 100644
index 0000000..4c97092
--- /dev/null
+++ b/migrations/env.py
@@ -0,0 +1,113 @@
+import logging
+from logging.config import fileConfig
+
+from flask import current_app
+
+from alembic import context
+
+# this is the Alembic Config object, which provides
+# access to the values within the .ini file in use.
+config = context.config
+
+# Interpret the config file for Python logging.
+# This line sets up loggers basically.
+fileConfig(config.config_file_name)
+logger = logging.getLogger('alembic.env')
+
+
+def get_engine():
+    try:
+        # this works with Flask-SQLAlchemy<3 and Alchemical
+        return current_app.extensions['migrate'].db.get_engine()
+    except (TypeError, AttributeError):
+        # this works with Flask-SQLAlchemy>=3
+        return current_app.extensions['migrate'].db.engine
+
+
+def get_engine_url():
+    try:
+        return get_engine().url.render_as_string(hide_password=False).replace(
+            '%', '%%')
+    except AttributeError:
+        return str(get_engine().url).replace('%', '%%')
+
+
+# add your model's MetaData object here
+# for 'autogenerate' support
+# from myapp import mymodel
+# target_metadata = mymodel.Base.metadata
+config.set_main_option('sqlalchemy.url', get_engine_url())
+target_db = current_app.extensions['migrate'].db
+
+# other values from the config, defined by the needs of env.py,
+# can be acquired:
+# my_important_option = config.get_main_option("my_important_option")
+# ... etc.
+
+
+def get_metadata():
+    if hasattr(target_db, 'metadatas'):
+        return target_db.metadatas[None]
+    return target_db.metadata
+
+
+def run_migrations_offline():
+    """Run migrations in 'offline' mode.
+
+    This configures the context with just a URL
+    and not an Engine, though an Engine is acceptable
+    here as well.  By skipping the Engine creation
+    we don't even need a DBAPI to be available.
+
+    Calls to context.execute() here emit the given string to the
+    script output.
+
+    """
+    url = config.get_main_option("sqlalchemy.url")
+    context.configure(
+        url=url, target_metadata=get_metadata(), literal_binds=True
+    )
+
+    with context.begin_transaction():
+        context.run_migrations()
+
+
+def run_migrations_online():
+    """Run migrations in 'online' mode.
+
+    In this scenario we need to create an Engine
+    and associate a connection with the context.
+
+    """
+
+    # this callback is used to prevent an auto-migration from being generated
+    # when there are no changes to the schema
+    # reference: http://alembic.zzzcomputing.com/en/latest/cookbook.html
+    def process_revision_directives(context, revision, directives):
+        if getattr(config.cmd_opts, 'autogenerate', False):
+            script = directives[0]
+            if script.upgrade_ops.is_empty():
+                directives[:] = []
+                logger.info('No changes in schema detected.')
+
+    conf_args = current_app.extensions['migrate'].configure_args
+    if conf_args.get("process_revision_directives") is None:
+        conf_args["process_revision_directives"] = process_revision_directives
+
+    connectable = get_engine()
+
+    with connectable.connect() as connection:
+        context.configure(
+            connection=connection,
+            target_metadata=get_metadata(),
+            **conf_args
+        )
+
+        with context.begin_transaction():
+            context.run_migrations()
+
+
+if context.is_offline_mode():
+    run_migrations_offline()
+else:
+    run_migrations_online()
diff --git a/migrations/script.py.mako b/migrations/script.py.mako
new file mode 100644
index 0000000..2c01563
--- /dev/null
+++ b/migrations/script.py.mako
@@ -0,0 +1,24 @@
+"""${message}
+
+Revision ID: ${up_revision}
+Revises: ${down_revision | comma,n}
+Create Date: ${create_date}
+
+"""
+from alembic import op
+import sqlalchemy as sa
+${imports if imports else ""}
+
+# revision identifiers, used by Alembic.
+revision = ${repr(up_revision)}
+down_revision = ${repr(down_revision)}
+branch_labels = ${repr(branch_labels)}
+depends_on = ${repr(depends_on)}
+
+
+def upgrade():
+    ${upgrades if upgrades else "pass"}
+
+
+def downgrade():
+    ${downgrades if downgrades else "pass"}
diff --git a/requirements.txt b/requirements.txt
index d5cb30f..3c9ceeb 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -1,11 +1,29 @@
 # Flask and Extensions
 Flask==2.3.3
+
+# Schema for validations
 Flask-Marshmallow==0.15.0
 marshmallow==3.19.0
+
+# CORS
 Flask-Cors==3.0.10
+
+# Deployment
 gunicorn
+
+# Swagger
 flask-swagger-ui
 
+# Database
+flask-sqlalchemy
+flask-migrate
+psycopg2-binary
+alembic
+
+
+# Env 
+python-dotenv
+
 
 
 
diff --git a/scripts/entrypoint.sh b/scripts/entrypoint.sh
new file mode 100755
index 0000000..8c7018a
--- /dev/null
+++ b/scripts/entrypoint.sh
@@ -0,0 +1,7 @@
+#!/bin/sh
+
+echo "Running DB migrations..."
+flask db upgrade
+
+echo "Starting Gunicorn server..."
+exec gunicorn -w 4 -b 0.0.0.0:5000 wsgi:wsgi_app