CFSL Integrated Report 2025

101

Introduction

Group Overview

Leadership

Strategy & Performance

Risk Management Report (Continued)

CREDIT RISK Credit Risk Management Principles Cim Finance’s credit risk management framework is guided by a set of governing principles outlined in credit-related policies and standards. operating procedures tailored to each lending segment. The framework’s primary objective is to ensure that all material credit risks faced by the Group are consistently identified, measured, managed, monitored, thorough evaluation of proposed credit extensions, the setting of specific and appropriate limits, continuous monitoring throughout the exposure’s lifecycle, the active deployment of credit mitigation tools, and a disciplined approach to recognising credit impairment. The risk management function provides independent oversight of credit risk, and ensures effective risk reporting to the Risk Management Committee and the Board. This includes tracking developments in credit risk and compliance with specific risk policies and limits. Significant credit risk exposures are regularly monitored by the Debtors Monitoring Committee, enabling closer attention and timely action, when appropriate. The Credit Risk function operates independently of the Business Units, offering robust oversight and challenging the credit risk management activities undertaken by these units. mitigated and reported on. This is achieved through the These principles are reinforced by more specific processes and

Assessing and recommending the ECL provisions, including the key IFRS 9 inputs and any necessary in-model and post model adjustment provisions. Material changes to the ECL Standard and to the models are reviewed and approved by the Risk Management Committee.

Oversight of the first line ensures that credit risk remains within the appetite set by the Board, and that controls are being operated adequately and effectively.

CREDIT RISK FUNCTION

Defining the credit risk appetite measures for the management of concentration risk, recommending changes to credit policies and enhancement in controls that must be in place to mitigate credit risk.

Independent monitoring and reporting of the performance of credit scorecards and risk profile of the portfolio.