Risk Mitigation

ETHIS as a P2P platform facilitates direct financing towards Project Owner which is based on agreement between Funders and Project Owner as Beneficiary. ETHIS is an agent (al-wakeel) in financing agreements based on Terms and Conditions.

It is important to notice that each funding activity has a different level of risk, in which Project Owner / Beneficiary has probability of overdue repayment and not fulfilling the financial obligation towards the Funders.

The fund used for operational purposes by the Beneficiary is limited in use and allocation, only for proposed development and construction or aims written in funding agreement. The status of fund is fully-owned by Funder and not tributed to the Platform or Beneficiary.

Financial loss may happen in your funding. We strongly suggest you to always consider possible risk from different perspectives before funding by reading the agreement thoroughly.

However, ETHIS has a high level filtering system and due diligence before financing proposals to the Project Owner, including the requirements that should be fulfilled by potential beneficiaries.

Belows are possible risks that you can understand to identify your funding decision:

• Has been operating for more than one year.

• Has complete project and company documents.

• Has annual sales of more than IDR 500,000,000.

• Had positive cash flow in the last 12 months.

Overdue repayment is demanded to pay and updated by ETHIS. We will contact Beneficiaries for the unaccomplished scheduled repayment to offer the best solution method. Funders will be informed appropriately and Beneficiaries will be reminded for the next repayment period until fully paid.

Our services are equipped with risk mitigation strategies such as due diligence, verification, and collateral submission. However, there may be a failure in repayment from Beneficiaries registered on our platform.

Submission of collateral aims as a commitment from Project Owner to comply with the responsibility towards the Funders and their protection to prevent the mismanagement.

Some fail payment factors are force majeure such as critical illness, death, or natural disaster. If default on the installment happens, ETHIS will notify quickly to the Funders and carry out efforts on collection towards the Beneficiaries as our commitment to solve it fairly.

Overdue Payment for more than 45 days is accounted as default.

In this case, ETHIS will issue a subpoena for Beneficiary and offer some options:

• To restructure the financing agreement for a longer payment period. Funders may also request to secure their funding for a rescheduled payment.

• For a safe deal, a lawful liquidating asset is guaranteed according to the capital market to recover the loss from the financing.

• If there is any negligence in the use of funds, we take legal action towards the business, shareholder and/or board of directors. This action also has another function to entail the Beneficiary in submitting the new information, which can be used to predict their capability on repayment. All legal actions will be taken after the Funders’ consent.

This action will be taken based on the majority voice of the Funders.

If the fraud is found in which the financing applicant with fake identification shows the probability of failure to pay, the Beneficiary may be subjected as a victim of identity theft, or fake information on salary and debt obligations which affects their payment ability. To prevent this, ETHIS accentuates due diligence systems and risk management and proceeds with laws.

• The increment of wholesale price and others, during the project, is the responsibility of Beneficiary.

• The Force Majeure in this agreement includes natural disasters (earthquake, flood, erupting volcano, landslide, fire, riots, wars, uprisings and epidemic).

• Government regulations which influence the overdue repayment/project accomplishment.

In the event of Force Majeure, the funding recipient must notify the First Party in writing, no later than 3 (three) days from the occurrence of Force Majeure accompanied by valid evidence, as well as when the Force Majeure ends.

We suggest you participate in funding with small amounts in different projects, instead of placing all money in a single project to minimize the possible loss. This helps you to prevent failure payment. Discuss with your financial advisor before funding in ETHIS.

Note: Minimum amount is IDR 0.