confrontation analysis

Decision-making is an essential part of all projects in life. Decisions often involve risk or uncertainty with respect to the outcome. In order to approving a loan especially for agricultural loan such as palm oil plantation which need a rigid and smart decision to approve, because its risk and the probability of default that the money cannot be repay. Because of that, this paper explain about the steps of Bank XYZ decision process in order to make a decision for PT. ABC, a company engaged in palm oil plantation. There are several analysis to help the decision- maker such as financial analysis, sensitivity analysis, collateral analysis, and term and condition of the loan. Those analysis stated in the loan proposal for the need of credit committe meeting. Keywords: decision making, loan, credit committe, palm oil, finance
1. Introduction
Decision-making mechanisms vary from on financial institution to another, and often depend on the loan amount and loan term proposed.
The government owned financial institution, Bank XYZ, is one of the local bank that actively supporting the palm oil industries by providing massive line of credit to the industry. Palm oil industries are still has the highest priority in term of plantation funding because it provide good returns to them as well. The reason is that at the demand for palm oil derivatives are still pretty high especially for food source as well as energy. Even when other commodities are unstable, palm oil products can still provide good margin. This can be seen from the selling price of Crude Palm Oil (CPO) which reaches USD 1,000 per ton while other commodities can only fetch a selling price of around USD 400 per tones (Jakarta Post, 2012). Even though it is the bank priority to support the palm oil industry, Bank XYZ still performs rigorous selection when approving and disbursing the loans. Amongst other requirements is that the prospective creditor must have a sound balance sheet and good financial performance and