This Risk Management Policy is designed to outline the practices and safeguards Ghashful has in place to manage risks related to financing mobile phone purchases for individuals, SMEs, partner corporate employees, and maintaining partner relationships. Our primary goal is to ensure a balanced approach to mitigating potential financial, operational, and market risks while fostering financial inclusion and business growth.

1. Authentication of Borrowers

To minimize the risk of fraud and ensure that only legitimate borrowers access financing, Ghashful requires a robust authentication process. This includes:

• NID (National ID) Verification: All borrowers must provide a valid national identification document, which is verified through appropriate channels.
• Financial Capacity Check: Borrowers must demonstrate their financial capacity by submitting recent bank statements, and the information is cross-checked against verified sources.
• Live Photo Verification: Borrowers are required to complete live photo verification to prevent identity theft or misrepresentation.
• Bank Account Verification: To ensure funds are disbursed securely, Ghashful verifies the borrower’s bank account details, matching them with their ID and other financial records.

2. Insurance Coverage for Devices

To mitigate the risk of damage or loss of the financed mobile devices, Ghashful ensures insurance coverage for all devices purchased through the platform. Partner insurance companies, such as Green Delta Insurance, offer comprehensive protection for financed mobile phones, covering risks such as theft, accidental damage, and malfunction. This protection is designed to secure both the borrower and the lender from unexpected financial losses.

3. Capacity Development of Borrowers

Ghashful is committed to improving the financial literacy and capabilities of its borrowers. This ensures that individuals and SMEs understand their financial responsibilities, improving their capacity to repay loans on time. Capacity-building activities include:

• Financial literacy training for individuals and SMEs
• Workshops on business development for SMEs to grow their businesses sustainably
• Personalized advice and guidance for corporate partners to better manage device financing for their employees

These capacity development initiatives help reduce loan defaults and ensure sustainable growth for borrowers.

4. Verification of Inputs and Regular Monitoring

Regular monitoring is conducted throughout the loan period to assess the financial health and behavior of borrowers. This includes:

• Verification of Inputs: Ghashful periodically verifies key borrower information, such as employment status for individuals, cash flow for SMEs, and overall business performance for corporate borrowers.
• Regular Monitoring: Monitoring systems track repayments, assess potential early warning signs of default, and flag any discrepancies for further investigation. Ghashful’s monitoring team also works closely with partner banks and financial institutions to ensure borrowers remain within the agreed terms.

5. Samsung Knox Guard Protection

To further safeguard the devices, all financed mobile phones are equipped with Samsung Knox Guard, which offers an additional layer of security. This system ensures that, in the case of loan default or non-compliance, the device can be remotely locked until the borrower meets their financial obligations. Knox Guard acts as a deterrent against misuse of devices and adds an additional layer of asset protection for both Ghashful and the lenders.

6. Market Risk

Ghashful acknowledges the potential impact of market fluctuations on the repayment capacity of its borrowers, particularly SMEs and corporate borrowers. To mitigate market risk:

• Ghashful continuously monitors macroeconomic indicators, such as inflation rates and interest rates, to anticipate potential challenges that may affect borrowers' financial stability.
• Diversification of the loan portfolio across various sectors helps reduce the concentration of risk.
• Regular engagement with partner financial institutions allows for adaptive strategies, such as restructuring loans or extending repayment periods in case of significant economic disruptions.

This Risk Management Policy provides a comprehensive approach to addressing the potential risks involved in Ghashful’s device financing operations, ensuring the financial security of its borrowers, lenders, and partners. Through robust verification processes, continuous monitoring, insurance coverage, and capacity development, Ghashful is committed to sustainable and secure financial inclusion.