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UAE banks are at risk

South Africa’s leading risk management consultancy, PIC Solutions, is in talks with UAE finance houses and retailers to launch a credit rating bureau in the country next year.

South Africa’s leading risk management consultancy, PIC Solutions, is in talks with UAE finance houses and retailers to launch a credit rating bureau in the country next year. The company specialises in working with credit card companies and other lending houses, to rate the credit worthiness of individuals. The scoring system, used extensively in the West, helps lenders decided whether or not to authorise credit cards and other loans.

“At the moment, especially in the UAE, it is very easy to attain loans and credit cards. Hardly any checks are done, and there are many cases now of people just not paying one card and taking out another. This is crazy, and there is definitely a need for a credit rating agency, which all lenders work with,” says Stephen Leonard, managing director of PIC Solutions.

“We are developing the software needed for this to work in the UAE. Given the population growth being experienced, it is all the more important,” he adds.
Saudi Arabia and Kuwait have already established credit bureaus, and the UAE model is expected to be similar. The company is one of many South African based firms now making inroads in the GCC.

“South Africa is a mix of emerging and developed markets, and it’s very similar in many ways to the Gulf market. There are many parallels, and that gives us a huge advantage,” says Leonard. “The reaction we have had at Gitex has been excellent, and we have formed many potential new alliances with local companies,” he adds.

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