Risk Management

Ferratum's risk management is the duty of the Board of Directors and the risk committee. Ferratum's risk management is based on prudent operational principles which aim to identify and manage the major risks that Ferratum may face in its business.

The Board of Directors is aware of inter alia the following risks relating to its business and industry:

  • An economic slowdown could adversely affect the demand for Ferratum's mobile consumer loans, increase its credit losses and decrease its growth.
  • Ferratum may not be able to successfully evaluate the creditworthiness of its customers, may not price its consumer loan products correctly and may not be able to adequately diversify its mobile consumer loan portfolio.
  • If Ferratum's risk provisions in relation to credit losses are not sufficient, Ferratum's results of operations and financial condition may be adversely affected.
  • If Ferratum incurs a large amount of fraud-related losses, Ferratum's results of operations and financial condition may be adversely affected.
  • If Ferratum does not generate a sufficient amount of cash to satisfy its liquidity needs and may not be able to grow its business as a result of cash shortages.
  • If Ferratum does not have access to financing under affordable terms, it may not be able to expand its business and refinance its existing or future indebtedness.
  • Ferratum's business and results of operations may be adversely affected if Ferratum is unable to manage its growth effectively.
  • Any disruption in Ferratum's information systems or external telecommunication infrastructure worldwide could adversely affect Ferratum's operations.
  • If Ferratum fails to geographically diversify and expand its operations and customer base, its business may be harmed.
  • Negative public perception and press coverage of short-term unsecured consumer loans could negatively affect Ferratum's revenues and results of operations.
  • Competition in the short-term lending industry could cause Ferratum to lose its market share and revenues.
  • A reduction in demand for Ferratum's products, and failure by Ferratum to develop innovative and attractive products, could adversely affect Ferratum's business and results of operations.
  • Ferratum's operations are subject to exchange rate risk.
  • Ferratum is subject to accounting and management risk.
  • Certain tax positions taken by Ferratum requires the judgment of management and could turn to be inefficient or challenged by tax authorities.
  • If Ferratum loses its current CEO or key management or is unable to attract and retain the talent required for its business, Ferratum's operating results may suffer.
  • Ferratum may incur property, casualty or other losses not covered by insurance.
  • Ferratum is subject to various consumer protection laws, other local legal and regulatory requirements and European law, changes of which or interpretations of which by authorities could significantly impact Ferratum's business.
  • Ferratum may fail to successfully manage the diverse sets of regulatory requirements Ferratum currently is subject to and may face regulatory problems entering into new markets.
  • Ferratum's business may be challenged by consumers, consumer protection organizations, courts, or regulatory agencies in connection with compliance with the EU Consumer Credit Directive and the national laws implementing the Directive.
  • The nature of Ferratum's business as a provider of mobile consumer loans may be misunderstood by customers, consumer protection organizations and other people, which may have an adverse effect on our reputation.
  • Ferratum may lose required licences to operate Ferratum's consumer loan business or face challenges to renew such licences.
  • Ferratum's Maltese banking subsidiary may fail to comply with all regulations it is subject to and such failures could materially impact its operations and strategy.
  • Ferratum is subject to a diverse set of tax regimes in the jurisdictions it operates in and changes in such tax regimes could materially impact its business, financial condition, or results of operations.