Do you know one of the ways to diversify your investment risk is to set up the Max Borrower Exposure feature?
This feature allows you to limit the maximum funding amount allocated by the Planned Funding Feature Bot automatically to one borrower according to the percentage of the principal you owe. This feature can only be activated if your total loan principal exceeds IDR 3,000,000
*picture above is funding information that occurs in the same 1 borrower.
You have invested into three different Issuers as follow:
Borrower A : IDR 5 Million (into 3 Notes)
Borrower B : IDR 2 Million (into 2 Notes)
Borrower C : IDR 16 Million (into 2 Notes)
Total Outstanding Principal : IDR 23 Million
How to find out your percentage level of exposure
= Amount of Funding at Borrower / Total Funding
Your Borrower Exposure in borrower A = IDR 5 Million / 23 Million = 22%
Your Borrower Exposure in borrower B = IDR 2 Million / 23 Million = 9%
Your Borrower Exposure in borrower C = IDR 16 million / 23 Million = 70%
**Investments in Borrower A & C are of higher risk due to larger exposure.
Scenario: If % Maximum Funding per Borrower is set at 10% and wants to fund IDR 100,000
How to find out your Maximum Funding Limit to match a predefined Exposure Percentage level
= Percentage of arrangements (x) Total current funds (Outstanding Principal)
The Auto Invest bot will not invest any further in Borrower A & Borrower C
because yours Maximum Borrower Exposure has already exceeded 10%
Funding with MBE: 10% x 23 million = 2,300,000
Borrower A of 5 million = risky funding because it has exceeded the maximum funding per borrower
Borrower C of 16 million = risky funding because it has exceeded the maximum funding per borrower
While the Auto Invest bot will be investing in Borrowers B
Borrower B of 2 million = good funding because it does not exceed the maximum funding per borrower
***These funding arrangements will apply continuously to all new loans that you fund.
The Maximum Borrower Exposure feature will be enabled only if Auto Invest Bot is activated.
It's important to understand how the feature works, this is to ensure that you've set the correct percentage. At the same time, this will help diversify and reduce your Funding risk to just one Borrower.
Check your Maximum Borrower Exposure setting now, to make sure you've set it accurately!