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Loans receivable, net of credit impairment losses

12 Months Ended

Dec. 31, 2021

14. Loans Receivable, Net Of Credit Impairment Losses

14. Loans receivable, net of credit impairment losses

The total loans receivable are comprised of the following:

	As of December 31,
	2020			2021
	RMB’000			RMB’000
Loans receivable at amortized cost		762,992			754,393
Accrued interest		377,983			398,610
Gross loans receivable		1,140,975			1,153,003
Less: Credit impairment losses		(478,792	)		(597,870	)
Loans receivable, net of credit impairment losses		662,183			555,133

The following table provides the changes in credit impairment losses between the beginning and the end of the annual period:

	As of December 31,
	2020			2021
	RMB’000			RMB’000
Credit impairment losses as at January 1		423,773			478,792
Charge to statement of profit		55,264			119,078
Novated to a related party		(245	)		-
Credit impairment losses as of December 31		478,792			597,870

The Company originates loans to customers located primarily in Wuhan City, Hubei Province. The Company’s headquarters, borrowers and operations are located in Wuhan, People’s Republic of China, the epicenter for the COVID-19 pandemic. As a result of the COVID-19 outbreak which was first reported on December 31, 2019 in Wuhan, People’s Republic of China, the Chinese government imposed a lockdown on the entire Hubei Province, travel restrictions and quarantine, the Company’s borrowers and operations have been significantly disrupted. Further, all of our customers are located in Wuhan, People’s Republic of China, as a result of the COVID-19 pandemic, government lockdown, travel restrictions, reduced economic activity and quarantines imposed by the Chinese government, together with the overall domestic economy downturn, our customers’ business operations, financial conditions and cash flows were materially adversely affected, which, in turn, materially adversely affected our collection of interest and principal on our loans to customers.

This geographic concentration of credit exposes the Company to a higher degree of risk associated with this economic region.

The loans receivable were secured, interest at range from 1.25% to 3.30% (2020: 1.25% to 3.30%) and repayable on demand.