DCG, local distributors to share financial information

Dubai IT channel stakeholders move to enhance financial transparency and credit security

Tags: Dubai Computer GroupDubai Computer Group (DCG) (www.dcgdubai.com/)Dubai Computer Traders Group
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DCG, local distributors to share financial information Rughwani says the new plan is aimed at tackling the issue of credit security and promoting financial transparency.
By  Manda Banda Published  April 10, 2014

The Dubai Computer Group (DCG) has announced plans that will see its members share financial information with representatives from the local distributor community as part of a wider campaign aimed at promoting financial transparency relating to credit schemes offered to resellers by distributors.

Although details on how the plan will be implemented are still being hammered out, the DCG said it has been compelled to forge closer cooperation with all IT distributors in Dubai as a way of curbing ‘reseller runaways' in the local channel.

Shailendra Rughwani, president at DCG and managing director at Experts Computer Group, said four years ago, the local channel saw a lot of reseller businesses exiting the market with huge unpaid debts and this plan is aimed at tackling the issue of credit security and how distributors extend these schemes to resellers. "We havent' seen a lot of runaways in the past two years because the DCG has taken it upon itself to clean up the Dubai channel," he said.

Rughwani added that the plan to set up a ‘special financial committee' from the DCG and the distribution community will look at ways on how the association can share information with those entrusted with credit and risk management at distributor level.

"We know credit and financial controllers from the distributor community meet regularly to share information amongst themselves about possible risks and how to manage the credit terms they offer to resellers in Dubai," he noted.

He said this initiative will complement what is already in place and give further impetus to promoting transparency and ethical business conduct in the local channel.

1259 days ago
Ranjit S Gurkar

The initiative taken by DCG to educate th trade on matters of Financial Management & Credit.

However, it would be exteremely difficult for the DCG to collect data and share information on potential credit defaults amongst Traders ! No business entity is going to share information that they are facing difficulties in cashflow and hence potential defaults on payment.

It would easier for organizations such as Euler Hermes and others in the group to collect such information from the master distributors in each country, and share it with vendors and master distributors !

To a certain extent , bad credit decisions taken by traders, dealers etc are to blame. It is important to get the final consumer to pay their dues in a timely fashion. This would indeed help to reduce the 'cash to cash ' cycle , and minimize the need for increased working capital!

1259 days ago
HARI K.P.K

There are two types of problematic dealers - 1) who intention is to run away with lot of money 2) temporary problems as money got stuck with some order/customer. The 1st guys will continue to fleece the market irrespective of what you do. the 2nd guys will depend on other distributors to continue their business and will try to balance the payment. Curtailing credit to the 2nd guys will put his business to a standstill and the end result will be same -closing of business and no money for the distis. Distis would like to share their credit exposure to others and dealers on their end wouldn't want to expose their customer list to all distis (especially the defaulting customer). There are no easy solution which DCG will realise slowly.

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