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DCG, local distributors to share financial information

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

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.

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.

Rakesh Bohra, Advisory Panel member at DCG and CEO at Trinity Group of companies, agreed and said currently credit security is offered on an individual basis and what the DCG would like to see is promote members that have solid businesses, ethical business conduct and good credit status to local distributors.

"What has been happening in the past is that most resellers who know about a potential runaway would withhold information until they collected the monies owed to them," he said. "This has to stop and and this initiative is a welcome move for us as it will promote the DCG as the only body that can vet its own members that apply for credit terms."

Rao A.P, manager, Credit and Collection at regional distributor FDC International, said from past experiences, most Dubai-based resellers are reluctant to share financial information even about their own business.

He said as distributors operating in Dubai, they is need to stand united in promoting growth and any initiative that takes the market forward should be supported. "As FDC, we support this plan and we I can say that we would like to be a part of it," Rao said.

He added that for this initiative to have a broader impact on the local channel, the DCG needs to aggressively grow its membership and screen members regularly.

Dharmendra Sawlani, general secretary, DCG, agreed and said screening under the proposed plan with distributors will have to be done on both sides.

"What we have learnt is that education is key when it comes to financially management and prudence. As an association, we owe it to our members to help them understand the important of prudent financial and credit management," he said.

Sawlani added that the DCG has already started holding DCG workshops with members where industry experts come to educate, inform and demystify any misinformation on credit schemes available to them.

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