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Credit risk | 12 Months Ended
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Dec. 31, 2022
Credit Risk | 5. Credit risk Credit risk is the risk that a customer or counterparty fail to fulfill its contractual obligations resulting in financial loss to the Company. The Company’s main income generating activity is lending to customers and therefore credit risk is a principal risk. Credit risk mainly arises from loans to customers. The Company considers all elements of credit risk exposure such as counterparty default risk for risk management purposes. Credit risk management The Company’s credit committee is responsible for managing the Company’s credit risk by:
· | Ensuring that the Company has appropriate credit risk practices, including an effective system of internal control, to consistently determine adequate allowances in accordance with the Company’s stated policies and procedures, IFRS and relevant supervisory guidance.
· | Identifying, assessing and measuring credit risk across the Company, from an individual loan to a portfolio level.
· | Creating credit policies to protect the Company against the identified risks including the requirements to obtain collateral from borrowers, to perform robust ongoing credit assessment of borrowers and to continually monitor exposures against internal risk limits.
· | Establishing a robust control framework regarding the authorization structure for the approval and renewal of credit facilities.
· | Developing and maintaining the Company’s processes for measuring expected credit loss including monitoring of credit risk, incorporation of forward-looking information and the method used to measure expected credit loss.
· | Ensuring that the Company has policies and procedures in place to appropriately maintain and validate methods used to assess and measure expected credit loss.
· | Establishing a sound credit risk accounting assessment and measurement process that provides it with a strong basis for common systems, tools and data to assess credit risk and to account for expected credit loss. Providing advice, guidance and specialist skills to business units to promote best practice throughout the Company in the management of credit risk.
Maximum exposure to credit risk - financial instruments subject to impairment The following table contains an analysis of the credit risk exposure of financial instruments for which an expected credit loss allowance is recognized. The gross carrying amount of financial assets below also represents the Company’s maximum exposure to credit risk on these assets.
|  | 202 2 |
|  | ECL staging |
|  | Stage 1 |  |  | Stage 2 |  |  | Stage 3 |  |  |  |
|  | Lifetime ECL |  |  | Lifetime ECL |  |  | Lifetime ECL |  |  | Total |
|  | RMB’000 |  |  | RMB’000 |  |  | RMB’000 |  |  | RMB’000 |
Loans receivable |  |  | - |  |  |  | - |  |  |  | 753,043 |  |  |  | 753,043 |
Accrued interest |  |  | - |  |  |  | - |  |  |  | 443,359 |  |  |  | 443,359 |
Gross loans receivable |  |  | - |  |  |  | - |  |  |  | 1,196,402 |  |  |  | 1,196,402 |
Credit impairment losses |  |  | - |  |  |  | - |  |  |  | (640,290 | ) |  |  | (640,290 | )
Carrying amount |  |  | - |  |  |  | - |  |  |  | 556,112 |  |  |  | 556,112 |
|  | 202 1 |
|  | ECL staging |
|  | Stage 1 |  |  | Stage 2 |  |  | Stage 3 |  |  |  |
|  | Lifetime ECL |  |  | Lifetime ECL |  |  | Lifetime ECL |  |  | Total |
|  | RMB’000 |  |  | RMB’000 |  |  | RMB’000 |  |  | RMB’000 |
Loans receivable |  |  | - |  |  |  | - |  |  |  | 754,393 |  |  |  | 754,393 |
Accrued interest |  |  | - |  |  |  | - |  |  |  | 398,610 |  |  |  | 398,610 |
Gross loans receivable |  |  | - |  |  |  | - |  |  |  | 1,153,003 |  |  |  | 1,153,003 |
Credit impairment losses |  |  | - |  |  |  | - |  |  |  | (597,870 | ) |  |  | (597,870 | )
Carrying amount |  |  | - |  |  |  | - |  |  |  | 555,133 |  |  |  | 555,133 |

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- Definition The disclosure of credit risk. [Refer: Credit risk [member]] + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Name IAS -Number 1 -IssueDate 2021-01-01 -Paragraph 10 -Subparagraph e -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IAS&num=1&code=ifrs-tx-2021-en-r&anchor=para_10_e&doctype=Standard -URIDate 2021-03-24 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Name IFRS -Number 7 -IssueDate 2021-01-01 -Section Credit risk -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IFRS&num=7&code=ifrs-tx-2021-en-r&doctype=Standard&dita_xref=IFRS07_g35A-38_TI -URIDate 2021-03-24 + Details
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