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RISK MANAGEMENT STRATEGIES
DEFAULT RISK
This is the risk that an increase in delinquency will result in losses to the company.
Mitigation – Edenbridge Capital has a credit policy that has been developed with managing lending in order to minimize exposures. This includes policies on underwriting, concentration and collateralization etc.
REFINANCE RISK
This is the risk that market conditions deteriorate making it difficult for Eden Bridge Capital to raise funding to finance its lending.
Mitigation – Eden Bridge Capital closely looks manages its asset-liability durations and keeps the asset duration shorter precisely to manage this risk.
REPUTATION RISK
This is the risk that adverse publicity will result in impairing performance of the business. Mitigation – Eden Bridge Capital maintains strong PR capacity to manage its brand integrity
LIQUIDITY RISK
This is the risk that a mismatch of assets and liabilities can lead to inability to meet short term obligations
Mitigation –Maintaining a healthy 80% Lending and 20% in Cash and Cash equivalents
REINVESTMENT RISK
This is the risk that the loan market conditions deteriorate such that it becomes difficult to lend and reasonable rates given the financing costs.
Mitigation – Eden Bridge Capital keeps a close watch on the economy which allows it to adapt to changing market situations
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