The accounts of a small mutual, Fitzroy & Carlton Community Credit Co-operative, have been qualified by its audit firm, which says the group may not be able to meet its prudent capital ratio requirement.FCCC provides services to people on low incomes and a large part of its loan portfolio is made up of unsecured and partially secured personal loans.According to FCCC's 2011/12 financial report, it has incurred "significant impairment losses" on its personal loan portfolio over the past few years.The co-operative lost $10,379 in the year to June. Its impairment loss was $74,000 - representing 2.3 per cent of loans and advances.Total assets fell from $11.5 million in 2010/11 to $9.7 million in the year to June.A note in the annual report said: "The directors have considered the issue of the co-operative's continued viability of operations and have undertaken corrective action - tighter loan criteria effective from April 2012, increased transaction fees and tighter cost control effective from August 2012 - and consider that these corrective actions will result in lower impairment losses and an overall improvement in operating results."The auditor's report said the co-operative's financial performance indicated "the existence of a material uncertainty that may cast significant doubt about the company's ability to continue as a going concern and, therefore, the company may be unable to realise its assets and discharge its liabilities in the normal course of business."FCCC may also have a governance problem. Four of its directors resigned during the 2011/12 financial year.