Credit group to shed light on risky business
New regional credit association could help IT channel build “more accurate” picture of customer risk profiles
The Middle East IT channel potentially stands to benefit from a credit reporting association that has been formed to facilitate the exchange of credit information on individuals and businesses between countries in the region.
Distributors and resellers have typically had to liaise with credit agencies on a country-specific basis up until now, making efforts to seek information on customers from different parts of the region difficult.
However, the formation of the Middle East Credit Reporting Association (MECRA) looks set to herald the development of a knowledge-sharing platform on best practices and pave the way for future cross-border data sharing agreements.
Although it has not been set up specifically for the IT industry, Zaid Kamhawi, chief business officer at Emcredit - and one of the founding members - said the establishment of the group would have implications for the channel, creating a scenario where it becomes possible to gain a clearer view of customer risk.
He said MECRA has been set up to drive similar credit reporting standards between regional credit bureaus and that once this is achieved, the association will be able to co-ordinate the exchange of credit on commercial entities operating across the region.
"This in itself will allow lenders to access information on the credit behaviour of potential commercial borrowers across the region and build a more accurate assessment of the risk profiles of each customer," explained Kamhawi.
"In the long-term, this will enable creditors to better assess the risk associated with a particular company or business owner, which will encourage better payment behaviour on the part of businesses and help reduce incidents of fraud and intended default," he added.
As well as UAE-based Emcredit, MECRA presently consists of Benefit Company in Bahrain, the National Bureau of Commercial Information in Oman and Credit Chex in Pakistan.
The founding members insist they will operate within the guidelines of each bureau and the local laws and regulations of each country. Other credit information providers from the region are invited to join the group, with the option of taking either full or associate membership.
"There is much to be done in the region in enforcing best practices in credit bureau management, standardisation of the regional credit reporting industry and the development of comprehensive reporting solutions," said Robin Watson, assistant general manager of Benefit Company following the launch of the association. "MECRA will be playing an active role in all these areas."