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• CapitalEdge Credit Fund focuses on strategies like gap funding, asset-backed lending, and micro-lending, generates returns primarily through interest income. Here’s how: • Interest Payments: Borrowers pay interest on the loans provided by the fund. The interest rates are set based on the credit risk, loan term, and collateral, providing a steady income stream to investors. • Fees: The fund may also charge origination fees, late payment fees, or other administrative fees to borrowers, adding to the overall return. • Principal Repayment: In addition to interest, the repayment of the principal amount adds to the fund's cash flow, which can be reinvested or distributed to investors. • Risk Management: By diversifying across different borrowers, industries, and loan types (gap funding, asset-backed lending, micro-lending), the fund mitigates risk and stabilizes returns.

• Asset-Backed Lending: • Risk Level: Lower • Explanation: Asset-backed lending involves loans secured by tangible assets (e.g., real estate or equipment). The collateral reduces risk, making this a lower-risk strategy compared to unsecured loans. The risk is lower as long as the value of the collateral remains stable, and the borrower maintains good credit. • Gap Funding: • Risk Level: Moderate • Explanation: While gap funding involves short-term loans to bridge financial gaps, it is typically secured by collateral, which mitigates the risk of loss if the borrower defaults. However, the risk remains moderate due to the short-term nature and reliance on the borrower’s ability to secure subsequent financing. • Micro-Lending: • Risk Level: Moderate • Explanation: Micro-lending involves providing small loans, often to individuals or small businesses in emerging markets. While collateral may be minimal, the risk is moderate due to the potential for default and the challenges of loan recovery. However, some micro-lending programs use social collateral or community-based approaches to mitigate risk.