CFSL Integrated Report 2022

CIM FINANCE. INTEGRATED REPORT 2022 | 69 System requirements are met, generating approval. AUTOMATED SYSTEM APPROVAL Acts on behalf of Board of Directors. Exposures not within the powers of the Credit Underwriting team for approval. CREDIT COMMITTEE CREDIT UNDERWRITING DEPARTMENT Credit not approved by system. Tiered individual authorities study and approve. CREDIT RISK CONCENTRATION Concentrations of credit risk arise when a number of clients are engaged in similar economic characteristics, or operate in the same geographical areas or industry sectors so that their collective ability to meet contractual obligations is uniformly affected by changes in economic, political or other conditions. A number of controls and measures is used to minimise undue concentration of exposure in our portfolios. It includes prudential limits set at borrower level, product level, industry level and by quality of credit, and these are independently monitored by an independent risk management function. CFSL has adopted a very prudent approach with respect to customer concentration limits (both single and group of closely related customers), which are more prudent than the levels recommended by local regulators to banks and non-banks in Mauritius. The credit risk profile is reported every quarter to the Risk Management Committee by the Chief Risk Officer and any deviation to the prudential limits are brought to the attention of the Committee. • CFSL has a very well diversified portfolio of customers with 250,000+ customers. The largest single and group of closely related customers was 8.1% of the Group’s Tier 1 Capital as at 30 September 2022 (Sep 21: 7%). The top 20 group of closely related customers was 14%of the Group’s Tier Capital at the financial year end (Sep 21: 16%). • With consumer finance being the core business, exposures to households represented the largest portion of the total credit book at 81% at end of September 2022 (Sep 21: 78%), • Exposures to the industry sectors other than to households are diversified as follows; SECTORWISE DISTRIBUTION September 2022 Administrative & Support 20.6% Wholesale and Retail Trade 28.6% Construction 18.1% Transport 6.5% Accommodation 2.5% Professional, scientific and technical activities 4.9% Manufacturing 8.0% Others 10.8%

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