Thursday, November 18, 2010

Credit Bureau Malaysia

The former SME Credit Bureau has rebranded itself as Credit Bureau Malaysia. The Credit Bureau is a useful source for business entities to check the creditworthiness of customers and clients. This will greatly assist businesses to avoid the many pitfalls in appraising new customers and clients and, greatly improve credit control procedures.

Click here to get to the Credit Bureau Malaysia webpage.

A brief background of the Credit Bureau, extracted from their website, is set out below:

Credit Bureau Malaysia is the leading provider of comprehensive and credible credit information and ratings on SMEs in Malaysia. It is:
  • An initiative by Bank Negara Malaysia to enhance SMEs access to financing
  • A convenient One Stop Centre for financiers and other credit grantors to retrieve credit information and ratings for credit evaluation purposes
  • A user friendly platform for SMEs to build their track record and credit standing to facilitate faster processing of their credit applications
The Bureau was incorporated on 3 June 2008 and began its operations on 1 July 2008. It is a joint venture between Credit Guarantee Corporation Malaysia Berhad (CGC), Dun and Bradstreet (D&B) Malaysia, a global provider of credit information on businesses, and The Associations of Banks in Malaysia (ABM) to enhance SMEs' access to financing and to create a sound credit culture amongst the business community in the country.

Endorsed by Bank Negara Malaysia (BNM), The Bureau is essentially a platform for SMEs to build, maintain and enhance their credit standings and ultimately, facilitate wider and easier access to financing. The Bureau also assists SMEs by providing them with an avenue for recourse and ensure only accurate and up to date information is reflected in their reports and ratings.

Our Developmental Role

The Bureau's developmental role is in line with the Government's objective of strengthening the financial structure for SMEs to enable them to increase their contribution to the Malaysian economy.

The Bureau undertakes this role by generating independent credit ratings on SMEs from credit and corporate business information obtained from credible sources such as Bank Negara Malaysia (BNM) and the Suruhanjaya Syarikat Malaysia (SSM).

These ratings and reports are available to potential financiers such as financial institutions and other credit grantors, such as multinational corporations and utility companies. Designed to incorporate both positive and negative credit information, the reports provide a balanced view of the SMEs' credit standings.

Traditionally, one of the key factors in credit evaluation is the historical conduct of payment behavior. SMEs that have no previous banking history would not have the 'reputational collateral' that would otherwise give them easier access to financing.

The Bureau's role is to "bridge" the current perceived information gap and address some of the issues related to inadequate financial track record involving SMEs. By bridging this gap, The Bureau hopes to create an increasing level of trust between SMEs and lenders, while promoting greater transparency and competition between lenders.

While The Bureau's reports and ratings are primarily used for credit evaluation, they may also be used by the SMEs to undertake a self-check. This is because The Bureau's credit ratings will identify and highlight areas that need improvement and the necessary remedial actions to be taken by SMEs in order to resolve their weaknesses and improve their credit standing.

Having identified their weaknesses, SMEs, if they wish, can seek professional counseling from The Bureau on the remedial actions required. This service is available to SMEs free of charge.