Multitude's risk management is the duty of the Board of Directors and the risk committee. Multitude's risk management is based on prudent operational principles which aim to identify and manage the major risks that Multitude 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 Multitude's mobile consumer loans, increase its credit losses and decrease its growth.
- Multitude 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 Multitude's risk provisions in relation to credit losses are not sufficient, Multitude's results of operations and financial condition may be adversely affected.
- If Multitude incurs a large amount of fraud-related losses, Multitude's results of operations and financial condition may be adversely affected.
- If Multitude 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 Multitude 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.
- Multitude's business and results of operations may be adversely affected if Multitude is unable to manage its growth effectively.
- Any disruption in Multitude's information systems or external telecommunication infrastructure worldwide could adversely affect Multitude's operations.
- If Multitude 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 Multitude's revenues and results of operations.
- Competition in the short-term lending industry could cause Multitude to lose its market share and revenues.
- A reduction in demand for Multitude's products, and failure by Multitude to develop innovative and attractive products, could adversely affect Multitude's business and results of operations.
- Multitude's operations are subject to exchange rate risk.
- Multitude is subject to accounting and management risk.
- Certain tax positions taken by Multitude requires the judgment of management and could turn to be inefficient or challenged by tax authorities.
- If Multitude loses its current CEO or key management or is unable to attract and retain the talent required for its business, Multitude's operating results may suffer.
- Multitude may incur property, casualty or other losses not covered by insurance.
- Multitude 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 Multitude's business.
- Multitude may fail to successfully manage the diverse sets of regulatory requirements Multitude currently is subject to and may face regulatory problems entering into new markets.
- Multitude's business may be challenged by consumers, consumer protection organisations, courts, or regulatory agencies in connection with compliance with the EU Consumer Credit Directive and the national laws implementing the Directive.
- The nature of Multitude's business as a provider of mobile consumer loans may be misunderstood by customers, consumer protection organisations and other people, which may have an adverse effect on Multitude’s reputation.
- Multitude may lose required licences to operate Multitude's consumer loan business or face challenges to renew such licences.
- Multitude'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.
- Multitude 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.