Interest rates and expected interests

Our credit assessment system utilizes a risk-based model to determine interest rates, using information from data and documents submitted to us from our applicants and external sources.

The results of our credit analysis would then be evaluated and validated through a site visit by our team. We call our system the Modalku Scoring Grade. It represents our assessment on the MSME owner’s and business’ capacity and drive to repay loans. As with most investments, a higher interest rate is accompanied by higher risk. We establish a higher interest rate on MSMEs we consider higher risk. Higher interest rates are established to compensate lenders for the risks they bear.