Managing Portfolio

There are several key concepts that will help you in compiling your lending portfolio on KoinWorks according to your financial goals.

Diversification

The Best Practices in Managing Portfolio

Funds for one loan can be distributed into many loans at once starting from Rp100,000 for each loan. Diversify your Lending Portfolio by lending in loans with various risks and Grades. There is a saying, “Don’t put all the eggs in one basket”. This saying can be applied in lending matters. That means, you must include diversification in your lending portfolio management strategy.

What is Diversification?

Diversification is a risk management technique by combining various products or funding instruments in a portfolio. The basic principle is that funding portfolios that are built from various types of products or funding instruments can mitigate the available risks if there is a loss in one of its funding instruments. In this case, Lenders can take advantage of the relatively small initial funding that is intentionally set by KoinWorks, which is IDR100,000, to split the capital allocation to many loans at once. That means that Lenders have the opportunity to share the magnitude of risk based on grade, tenor, loan type, and the most recommended practice is to have a lending portfolio containing a minimum of 100 loans at once.
For example, if you have a funding of IDR10,000,000, you should arrange a lending portfolio by diversifying the an amount of fund of IDR100,000 into 100 different loans at once with various interest rates and risks in order to maintain the level of profit and risk. Thus, you can minimize the possible risks because when there is 1 Borrower having failed to pay/loan default, you still have 99 other Borrowers/loans who will still actively pay their installments. By diversifying, we hope that when the basket falls, not all eggs break because there are still eggs in another basket. More information about the lending diversification strategy on KoinWorks, please refer to this page.

Credit Scoring

On KoinWorks, all loans that have passed the credit assessment process will be given various credit scorings. Loans will be given a score from A to E, which sequentially indicates the level of risk and interest from the lowest to the highest level of risk and interest. Each score also contains 5 other levels, from A1 to A5 and so on to the lowest E1 to E5. The riskier a loan is, the higher the level of risk to be a loan default. To compensate for this, a riskier loan is subject to a higher interest rate. With the information below, you can find a complete description of the risk / return level as follows:
diversification-graph

Managing Portfolio

There are several key concepts that will help you in compiling your lending portfolio on KoinWorks according to your financial goals.

Diversification

The Best Practices in Managing Portfolio

Funds for one loan can be distributed into many loans at once starting from IDR100,000 for each loan. Diversify your Lending Portfolio by lending in loans with various risks and Grades. There is a saying, “Don’t put all the eggs in one basket”. This saying can be applied in lending matters. That means, you must include diversification in your lending portfolio management strategy.

What is Diversification?

Diversification is a risk management technique by combining various products or funding instruments in a portfolio. The basic principle is that funding portfolios that are built from various types of products or funding instruments can mitigate the available risks if there is a loss in one of its funding instruments. In this case, Lenders can take advantage of the relatively small initial funding that is intentionally set by KoinWorks, which is IDR100,000, to split the capital allocation to many loans at once. That means that Lenders have the opportunity to share the magnitude of risk based on grade, tenor, loan type, and the most recommended practice is to have a lending portfolio containing a minimum of 100 loans at once.
For example, if you have a funding of IDR10,000,000, you should arrange a lending portfolio by diversifying the an amount of fund of IDR100,000 into 100 different loans at once with various interest rates and risks in order to maintain the level of profit and risk. Thus, you can minimize the possible risks because when there is 1 Borrower having failed to pay/loan default, you still have 99 other Borrowers/loans who will still actively pay their installments. By diversifying, we hope that when the basket falls, not all eggs break because there are still eggs in another basket. More information about the lending diversification strategy on KoinWorks, please refer to this page.

Credit Scoring

On KoinWorks, all loans that have passed the credit assessment process will be given various credit scorings. Loans will be given a score from A to E, which sequentially indicates the level of risk and interest from the lowest to the highest level of risk and interest. Each score also contains 5 other levels, from A1 to A5 and so on to the lowest E1 to E5. The riskier a loan is, the higher the level of risk to be a loan default. To compensate for this, a riskier loan is subject to a higher interest rate. With the information below, you can find a complete description of the risk / return level as follows:
grade a slider
grade b slider
grade c slider
grade d slider
grade e slider
grade and risk