The Effect of the Credit Deciding Authority Competency and the Effectiveness of Applying the Four Eyes Principle to Minimize Non Performing Loans on Small Medium Enterprise Segment in Pt. Bank Mandiri (Persero) Tbk Region I Sumatera I

This study aims to determine and analyze the influence of the competence of credit decision authority and the effectiveness of the application of the Four Eyes Principle to minimize non-performing loans in the Small Medium Enterprise (SME) segment at PT. Bank Mandiri (Persero) Tbk Region 1 Sumatera 1. The results of this study are expected to be useful input for controlling non-performing loans in the SME segment through developing the competency of authority holders and implementing the Four Eyes Principle as an effort to manage risks that may arise in lending. This research was conducted by distributing questionnaires to all authority holders in Region I Sumatera I consisting of SME and Retail Risk Management Units spread across the Sumatera I Region and 7 Area offices totaling 31 authority holders. In taking the sample of this study using a non-probability sampling method. The results showed that of the 5 factors that make up competence, the sub-variables of nature and character are the components that significantly play a role in the competence of the authority holder in making credit decisions. Whereas the application of the Four Eyes Principle method is the most appropriate risk management strategy in making credit decisions for the SME segment, however, the most suitable Four Eyes Principle is the Symmetry model. In this study, it was also revealed that weak monitoring is also the most important thing that should be the attention of Bank Mandiri to minimize non-performing loans. Keywords: Competence of authority holders, Four Eyes Principle, non-performing loans.