The Company carries out careful, integrated, and effective risk management. The implementation is regularly evaluated and refined to ensure its level of adequacy and as an effort to keep up with the latest developments in the aspect of risk management. In general, the risk management process is carried out within a comprehensive risk management framework that covers all identified risks encountered by the Company.

This risk management system also mitigates the impact of risks that might occur. All identified risks are assessed on an internally formulated scale, and the most important risks for the Company are tabulated in the risk profile. The Company’s risk profile is updated regularly. The implementation of the Company’s strategy always pays attention to the directed aspects of risk management. Before being agreed to be implemented, Every strategy developed must be accompanied by risks identified.


The risk management process in the Company takes place through the following stages:

1. Risk identification by considering internal and external factors.

2. Continuous and timely analysis and evaluation to set priorities and sources of risk.

3. Implementation of sustainable risk mitigation strategies and the resources needed for management

4. Communication and participation of all relevant stakeholders.

5. Risk profile recording and determination to be monitored and reviewed its developments and changes.


In managing the risks, the Company strives to utilize resources optimally by applying the precautionary principle. sustainability and ability of the Company to provide added value to shareholders and all stakeholders can be maintained.




The main financial risks that have great potential encontered by the Company are credit, market, funding and liquidity, and operational risks. Financial policies are carried out carefully in managing these risks so as not to cause harm to the Company.


Management policy towards financial risk is applied to minimize the potential and adverse financial impacts that may arise from these risks at acceptable parameters. In relation to risk management, the Company does not allow for speculative purpose derivative transactions.


Overview on the policies and objectives of financial risk management implemented by the Company includes several matters, namely:


a. Credit Risk

Credit proposal is apporeved through the Credit Committee which isresponsible for conducting assessments, providing recommendation and approving proposals. Meanwhile, the proposals that exceed the authority of the Board of Directors need approval from a Commissioner appointed as a member of the Credit Committee. This Committee pays attention and focus on economic changes and other matters that can affect the quality of customer credit. Based on current conditions, the Company ensures that the supervision and management of the loan portfolio will be maintained properly through the implementation of a conservative applicable credit policy.


In order to enable the Company to carry out segmented credit monitoring, financing portfolio diversification has been carried out into several risk aspects, including financing types and quality based on region, branch, period, industry type and so forth


As an unavoidable risk, Credit Risk can be managed up to acceptable limits. The Company has established policies in dealing with this risk. It is started by conducting selective process of receiving credit application which is subsequently signed with the principle of prudence. The application of credit will undergo a survey and analysis process and then approved by the Credit Committee. The Company also applies the Guidelines for the Application of Principles Regarding customers regulated by the Regulation regulation of Minister of Finance No. 45/KMK.06/2003 dated January 30, 2003 concerning the Application of Principles Concerning Customers to Non-Bank Financial Institutions, which have been amended by the Regulation of Minister of Finance No. 74 PMK.012/2006 dated August 31, 2006 and Decree of the Director General of financial institutions No.Kep-2833/LK/2003 dated May 12, 2003 concerning guidelines for the implementation of the Principles Regarding Customers at Non-Bank Financial Institutions.


b. Market Risk

Market risk is mainly due to changes in interest rates, Rupiah exchange rates, commodity prices and capital or loan prices, which can bring risks to the Company. In planning the Company’s business, the market risk that has a direct impact on the Company is in terms of managing interest rates. Changes in the reference interest rate will be a risk at the time of the change, especially when the interest rate is raised, which causes losses to the Company so that it can cause the Company’s credit risk to increase. For this reason, the Company consistently applies a fixed interest rate management by adjusting the loan interest rate to the loan interest rate and other funding burdens.


c. Funding and Liquidity Risk

The Company’s growth is very dependent on the availability of funding originating from banking facilities and capital as well as other funding sources to carry out financing activities. To minimize liquidity risk due to differences in the maturity of the Company’s investments and sources of funds, at present part of the funding is made through capital funds from banks. Funding through banking is done by pledging our accounts receivable to the bank, and with the proceeds of obtaining funds through credit and paid regularly to the bank, this will greatly help and strengthen the Company in terms of capital and assets.


d. Operational Risk

Operational risk management is a cycle of an ongoing process of monitoring risks due to failure or insufficient control of internal systems and processes, human factors, and events caused by external factors. To reduce internal operational risk, the Company has prepared the Information Technology System development process in connection with changes and product development. The Company also pays attention to this operational risk, because if there are problems arising in connection with this risk, it can have an impact and broad influence on the Company’s overall performance. In general, operational risk is a risk caused by weaknesses and failures in the internal control process of human factors (fraud, etc.), and technological systems coupled with information that is less than prospective borrowers. This Operational Risk is also closely related to market and economic/credit risk .