We advise lenders to diversify into as many loans as possible. With a diversified SME Digital Financing Platform lending portfolio, you would continue to receive a positive interest rate, even after factoring in default risk.
Loan default rate in Indonesia is generally low. However, we don’t take such issues lightly. All borrower applications go through a strict credit review process to assess MSME creditworthiness, along with the capability of its owner and management. After disbursing loan funds, we consistently monitor our borrowers and periodically remind them to submit their loan installments in a timely manner.
Unfortunately, default risk cannot be fully eliminated. Like any other alternative investments, lenders must accept default risk if all preventative measures fail. In addition, if you are an international lender, you may be exposed to foreign exchange risk. Generally, however, the Indonesian Rupiah (IDR) is currently a stable currency.