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PROVISION FUND
Rp. 3,552,763,267.74
- 0.89% Default rate
- Last Update: December 2020
Provision Fund is provided by PT Lunaria Annua Kapital, an affiliated company in partnership with PT Lunaria Annua Teknologi. PT Lunaria Annua Kapital and PT Lunaria Annua Teknologi agree on the Receivables Transfer Agreement. In this case, PT Lunaria Annua Teknologi will act as the authorized beneficiary of the Lenders to sell the receivables to PT Lunaria Annua Kapital.
PT Lunaria Annua Kapital will take over the collection responsibility to the defaulted Borrower. Upon stated as default, PT Lunaria Annua Kapital will continue billing the respective Borrower and any payment received will be allocated into Provision Fund. The available Provision Fund will be disbursed to minimize the loss of a Lender’s capital whenever a Borrower default.
Although KoinWorks uses a very rigorous credit assessment on each loan, lending activity has various risk levels and the risk of default may occur over time.
Please keep in mind that the Provision Fund provided by PT Lunaria Annua Kapital is not an assurance/warranty of lending safety and the amount is limited, and not covered or mandated in government regulations. Partnership between PT Lunaria Annua Teknologi and PT Lunaria Annua Kapital on Provision Fund can be terminated at any time. Along with the increasing number of borrower defaults, the limited Provision Fund may be exhausted from time to time so that it can not be used to minimize the loss of Lenders’ capitals. Lending through a peer to peer lending (P2P Lending) platform is also not guaranteed by Indonesia’s Deposit Insurance Agency (LPS).
How Does Provision Fund Work?
Borrower does not make any payments at all more than 90 days.
The loan marked as default.
The Provision Fund is disbursed by PT Lunaria Annua Kapital to KoinWorks.
KoinWorks disburses the Provision Fund to Lender(s).
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Capital Loss
Nett deficit between initial capital/principal allocated on a loan with the total repayment received from the loan.
- Capital Loss = Capital Loss = Principal - Σ (Net repayment)*
Example :
- - Lender allocated IDR50,000,000,- into a loan
- - Borrower has paid the installments for 4 months with the total amount of IDR10,000,000,- before being defaulted, so
The amount of Provision Fund disbursed will be determined by the total amount of capital loss multiplied by percentage of a loan Grade.
Provision Fund = % Grade x Capital Loss
So if the Grade of the loan default is A, then the Provision Fund will be disbursed 100% of the Capital Loss,
ie 100% x IDR40,000,000 = IDR40,000,000. It will continue like that up to Grade E, ie 20% x IDR40,000,000 = IDR8,000,000.
Grade & Provision Fund Percentages
Grade is the credit score set for each loan after the KoinWorks team conducts a comprehensive creditworthiness assessment.
In mitigating the risk for Lenders, KoinWorks believes that diversifying the funding into several loans with various Grades and loan types all at once is the best method to lend money through KoinWorks.
KoinWorks as a P2P Lending service provider will conduct regular review of the loan credit performance and continuously update the policy of this Provision Fund.
How Does KoinWorks Manage the Risks?
Tight Process in Assessing Credit Eligibility
The credit assessment method we use is the combination of method used by bank, innovative Machine Learning, and Sciences on Big Data.
Portfolio Management
Managing the total number of loan portfolios to ensure that every loan is distributed evenly into different industries and market levels.
Partnership
KoinWorks is actively working together with reputed partners for reducing the risk levels and to increase the quality of credit assessment. We are working with several e-commerce platforms, insurance company, and credit bureau.
Your lending will help the fulfillment of financial democratization in Indonesia and increase the financial inclusion.
©Koinworks 2016. All Rights Reserved.
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a Member of:
ATTENTION:
- The Information Technology-based Peer to Peer Lending Service is a civil agreement between Lender and Borrower, so that all risks arising from the agreement are borne entirely by each party.
- Every Lender is fully responsible for all credit risks of late or default payments. No national entity or authority is responsible for any such risks.
- The Operator with the approval of the respective Users (Lenders and/or Borrowers) accesses, acquires, stores, administers and/or uses the Users’ personal data of Users ("Data Utilization") on or inside objects, electronic devices (including smartphones or phones cellular), hardwares, softwares, electronic documents, applications or electronic systems belonging to Users or controlled by the Users, by notifying the purpose, limitations and mechanisms of the Data Utilization to the Users concerned before obtaining such consent.
- Lenders who do not have sufficient knowledge and experience on the lending business are advised not to use this service.
- Borrowers should carefully consider the loan interest rate along with other costs in accordance with the ability to pay off the loan.
- Every fraudulent activity is recorded digitally in cyberspace and may potentially be informed to the public through social media networks.
- Every User should read and understand this information before making a decision to become a Lender or Borrower.
- The Government, in this case the Financial Services Authority, shall not be liable for any breach or non-compliance by the User, either the Lender or the Borrower (either by User's intent or negligence) of the provisions of the laws and regulations or agreements or agreements between the Operator and the Lender and/or Borrower.
- Every transaction and lending activity or the implementation of the agreements on lending activity between or involving the Operator, Lender and/or Borrower shall be made through escrow and virtual accounts as required under the Regulation of the Financial Services Authority Number 77 / POJK.01 / 2016 on The Information Technology-based Peer to Peer Lending Service and the violation or non-compliance towards those provisions constitute evidence of a violation of law by the Operator so that the Operator shall bear the indemnity suffered by each User as a direct result of the above breach of the law without prejudice to the right of the User suffering loss according to the Civil Law.
