Dun & Bradstreet (D&B), an international business service company that promotes financial infrastructure and provides credit risk facilities, yesterday held a workshop for insurance providers and financial institutions in Accra.
According to Adebowale Atobatele, General Manager for Dun & Bradstreet Credit Bureau Ltd, the workshop is to educate insurers, banks and lenders on how to create value and address challenges in the sector.
The workshop also seeks to create a robust ecosystem where data is easily accessible to all stakeholders to enable them make informed choices.
The workshop addressed issues on how to deepen market pressure in insurance, how to deal with fraudulent claims and enhance profitability of insurance companies.
In his presentation, Godfred Cudjo, Financial Department, Bank of Ghana expressed gratitude to Dun &Bradstreet for such an initiative, noting that data accessibility is crucial to the work of credit bureaus. “We want to collaborate with the Police for motor insurance policy and this workshop will open our understanding better in the area,” Joseph Bentor, Head, Marketing and Research of External Relations, National Insurance Commission (NIC), said.
Ibrahim Aminu, African Partner Pool Manager-Invest in Africa called for a robust identification system in Ghana to make it easier for business transactions, he adds that, “a lot of companies struggle to get involved in the Oil and Gas sector because they are not big enough.
Participants from the workshop were drawn from the banks, insurance companies and other stakeholders in the financial sector.
Dun & Bradstreet (D&B) and Invest In Africa (IIA) about a month ago signed a Memorandum of Understanding (MOU) to support small and medium scale enterprises (SMEs) to make them investor ready through credit referencing.
Dun&Bradstreet(D&B) Ghana and Invest In Africa, IIA, have signed a Memorandum of Understanding (MOU), to support small and medium scale enterprises(SMEs) to make them investor ready through credit referencing.
With the signing of the MOU, it is expected that IIA and D&B will support SMEs on the African Partner Pool (APP) by; providing Information from D&B on the best way to manage books in order to easily access investment and finance, providing consent for D & B to conduct a credit report for SMEs, and share it with potential investors and partners.
D & B will also be the exclusive Credit Information Reporting Company through which all foreign companies seeking to do business with local companies on the APP can obtain a business profile report or credit information report
IIA, a cross-sector partnership of companies with the vision to create thriving African economies, has been set up to give businesses access to skills, finance and new markets. This is done through its key initiatives the African Partner Pool (APP) an online business platform that connects international companies to quality validated local businesses. www.africanpartnerpool.com.
Another initiative of Invest In Africa is the Business Excellence Programme, a combined Development Partners & Private Sector funded programme with the aim of building businesses to become more competitive.
Dun & Bradstreet is the leading provider of business information for risk management, sales & marketing, supply management and risk consulting decisions worldwide.
Signing the MOU, Adebowale Atobatele(D&B Ghana Country Manager)said: "We are excited about our partnership with Invest in Africa. It forms a core part of our objective in Ghana which is to create and deliver superior value to all stakeholders. Our partnership with Invest in Africa (Ghana) will help boost the confidence of investors in Ghanaian businesses while at the same time help local business and their owners develop the right profile to attract the right type of investments or financing that they require to grow their business.”
The APP Manager, Ibrahima Aminu stated that this is one of the initiatives IIA is taking to prepare SMEs for access to finance, the agreement with D&B will be of immense value to the SMEs on the APP as it will assist the SMEs on the APP to understand the requirements of financial institutions in applying for access to finance.
Dun & Bradstreet joins the cross sector group of partners that IIA is currently working with which includes Newmont Mining, Tullow Ghana, AB & David Law, GE, Millennium Development Authority (MiDA), Ecobank, UT Bank, Guinness Ghana, EY, GIPC, Modec Ghana, Societe Generale, AGI, GIPC
The latest Credit Reference bureau Dun & Bradstreet is hoping to capitalize on its international experience to succeed in the market.
Dun & Bradstreet (D&B) received its full operational license from the Bank of Ghana last Friday, joining the likes of XDS Data and Hudson Price Data Solutions.
Credit Reference Bureaus usually store information on the credit worthiness of customers who borrow or do business with financial institutions such as banks non-bank financial institutions among others.
The fledgling industry is already faced with inaccurate data challenges but D&B is optimistic its inclusion will bring enough competition to sanitize the system.
In a statement released by the company and sent to Citi Business News, Dun & Bradstreet expressed its excitement about launching business operations in the Ghanaian market.
“The main objective of this credit bureau is to provide information on the credit repayment trends of individuals and companies. The credit bureau will allow financial institutions to make an inquiry or check on a consumer or commercial entity before approving any form of credit or deciding on whether to sustain the credit granted. The credit bureau aggregates information among participating member financial institutions to provide the credit decision-maker with a more complete risk profile to enhance their risk mitigation capabilities.
The credit bureau will become a key player in the lending business as it will provide financial institutions with a better risk management tool and the bank customers will be better evaluated on their credit worthiness.
From the experience of credit bureaus in other countries, it was found that over time, borrowers stand to benefit from faster credit applications processing, faster disbursement of loans, fairer assessment and better adjusted quantum according to their more informed assessments.
Credit bureaus have long existed and are considered an integral part of the credit approval processes in a majority of developed economies such as those in North and South America, Australasia, Europe and Asia. Countries like New Zealand and Hong Kong have adopted credit bureaus since the 1980s while bureaus in the U.S. go back to the 1960s. Within the African region, D&B has implemented bureaus in countries like Egypt, Nigeria and Libya.
“D&B is pleased to launch business operations in Ghana and will work on creating a sustainable financial infrastructure in Ghana.
Our experience with government and private credit bureaus across the world has facilitated us in building this robust bureau for Ghana”, says Miguel Llenas, Executive Vice President at D&B.
Banks have been urged to holistically embrace the concept of credit bureaus to drastically help minimize the risk of borrowing and reduce the high levels of non-performing loans (NPLs) in their books.
According to the Chief Executive Officer of Dun & Bradstreet Credit Bureau, one of the world’s leading credit bureaus and sources of business information and insight, Mr. Miguel Llenas, when defaulters are aware of their information with the credit bureaus, they will move to clear their debts and ensure that they remain clean at all times in order to be declared credit-worthy.
He said many banks were dealing with many individuals and businesses which do not have genuine information about themselves; a situation which has created a lot of problems for the banks. Addressing a large number of credit controllers, accountants, bankers and players in the financial services sector in Accra on the relevance of credit bureaus, he said “Once you do not have proper information on the businesses and individuals you want to offer credit to, you feel reluctant to do so and doing it without the information is also taking a huge risk”, he said.
The heavy NPL in the books of the banks, which is about 14 per cent, has been partly attributed to the high interest regime in the country presently.
Mr. Llenas said should banks embrace credit bureaus such as Dun & Bradstreet, the NPLs could reduce to less than eight per cent in the coming years. He said many banks were reluctant to offer credits to businesses because of the lack of information; a practice which hurts an economy and noted that for the trend to change, they should be able to have accurate information which can only be sourced from credit bureaus.
Credit bureaus are institutions that specialise in collecting, collating and disseminating credit information. Credit information is collected from various traditional sources such as financial institutions, government departments, businesses and customers, as well as non-traditional sources such as utility providers, and compiled into credit information reports which help creditors in assessing repayment capabilities of prospective and existing customers. Credit bureaus aid lenders, borrowers and the economy as a whole.
The primary functions of credit bureaus are among other things; to ensure that accurate depiction of the "prospective borrowers' total credit exposure" and financial position is available to the creditors prior to making a credit decision.
It is also to protect creditors against unnecessary credit risk exposure and, therefore, against non-performing assets and defaults; prevent application fraud by authenticating application particulars; Protect consumers against financial mismanagement by basing their access to credit, and payable risk premium on their respective risk profile; and to facilitate improved efficiency and turnaround time of credit evaluation and decisions. From an economic standpoint, this translates into a healthier and more sustainable expansion of credit.
The call by Mr. Llenas comes at a time when banks in the country have become increasingly reluctant to release information on their creditors for what is believed to be fear of sharing their clients’ credit history with others.
But Mr. Llenas said the reluctance of the banks to do so was rather posing a greater risk to their businesses.
“Where the banks are not sure about the business of individual, they do not release credit and that has the potency to slow down economic growth because the needed credit to expand businesses and the economy in general would be lacking”, he said.
Mr. Llenas said Dun & Bradstreet, which has already received a provisional licence to operate in the country would fully launch its operations in the latter part of the year.
“We are investing up to $3 million to fully set up Dun & Bradstreet in Ghana to provide the best service ever from a credit bureau and we hope this will help transform the banking sector and the economy in general”, he said.
He urged the banks to make the sharing of information an easy task since that holds the key to protecting their operations and helping their clients to access funds to do the right businesses that would inure to the benefit of the economy.
The Associate Director of Dun & Bradstreet, Mr. Evans Sarpong, in his presentation reinforced the concept of credit bureau saying, “In spite of the different models in different periods, sound and forward-looking credit management always starts from credit data”.
He said credit bureau data had become more of a necessity during the financial crisis, boosting the use of monitoring tools.
Established in 1841, Dun & Bradstreet is listed on New York Stock Exchange (NYSE) and is present in over 180 countries with revenue of about US $ 1.53 billion.
Credit bureau giant Dun & Bradstreet Credit Bureaus Limited has organized a one-day workshop to facilitate an exchange of information on credit bureau services to enable effective operations in the financial sector.
Speaking at the workshop in Accra, Mr. Evans Sarpong, Associate Director, Dun & Bradstreet Credit Bureaus Limited, observed that establishing a reliable, effective credit information sharing platform is a priority area for developing a financial sector in the country,
“The establishment of a credible and useful database to be used for the credit bureau entirely depends on all stakeholders,” said Mr. Sarpong.
He explained that a successful collaboration between all stakeholders, with a holistic approach, will help in unlocking barriers and move forward to achieving set goals with derived benefits.
“Among the benefits are included increased credit extension because of better risk profiles, reduced credit processing costs and times as well as loan write-offs.
“It will also lower borrowing cost and enhance credit culture, which in turn will allow for the provision of much-needed finance for the development of various sectors.”
Mr. Sarpong added: “A good credit culture is an important prerequisite to a stable financial system in general and financial inclusion in particular. Credit bureaus have a significant impact on the development of a country.”
With presence in over 180 countries including Ghana, Dun & Bradstreet has established itself has the preferred credit bureau company in the world. The company was established in 1841 and listed on the New York Stock Exchange (NYSE).
A leading provider of global business information, Dun and Bradstreet is promising a drastic reduction in banks’ default rates should it get their full cooperation.
The firm which has secured a provisional license from the Central Bank to operate a credit reference bureau, is preparing to begin full operations in September.
Banks have often cited the high loan default rates as a major factor influencing the high interest rates regime.
But Dun and Bradstreet Chief Executive, Miguel Llenas tells Joy Business they can help the situation.
He said if the bureau collects all the information it needs from the banks by the end of this year, the loan default of 14 per cent will reduce to eight per cent in three years.
“That is going to happen because the people who have not paid today, [their] reports are going to be on the market and for them it is going to be a little bit more difficult to get credit so they will go back to the bank and pay – this is my experience in over 25 countries – people start paying loans that they didn’t pay before,” he explained.
Mr. Llenas says banks will now be able to make informed decisions with quality and accurate information.
Dun and Bradstreet which is currently listed on the New York Stock Exchange presently operates in over 200 countries and manages the world’s most valuable commercial database with information on over 200 million business entities.
Dun and Bradstreet (D&B) is to start full time operations as the second credit bureau in Ghana from September 2011, a year after XDS Data launched as the first.
Listed on the New York Stock Exchange, D&B was granted a credit referencing provisional license by the Bank of Ghana in October 2010.
The global company has since been putting in place the requisite operational structures including its infrastructure.
Speaking to Citi Business News, the Chief Executive of Dun and Bradstreet Credit Bureau Ghana, Llenas Miguel, said Ghana represents a new culture in their credit referencing operations in Africa.
According to him, “D&B’s operations in Ghana are the company's first private investment.
"This means the investors are from our own group and from local partners but neither the Central Bank nor bankers are involved as investors. In other countries like Egypt, we have the bankers, being owners together with us but we’re more like technical partners in that”
In other developed markets where D&B operates, it churns out about a million credit reports every month but here in Ghana, it plans to start with 5 thousand reports monthly and also consider profits only after 7 years of operations.
Regarding the constraints associated with gathering of credit-related data in Ghana, Mr. Miguel said they have tailor-made solutions to deal with the situation.
Regarding the constraints associated with gathering of credit-related data in Ghana, Mr. Miguel said they have tailor-made solutions to deal with the situation.
According to him, Ghana is to be the first country to see the full deployment of their new credit reporting system towards making Dun and Bradstreet Credit Bureau Ghana the number one in Africa.
“My personal goal is to develop bureaus totally favourable to the market with products, concepts clients and perspectives that are not normally done by other bureaus”.
According to him, D&B would be introducing new products to the Ghanaian market which would be the first since its operations in Africa. Ghana is going to be the first country to receive our newly launched credit report which is quite different from that which we use in Egypt and other places.”
Mr. Llenas Miguel was speaking to Citi Business News after a workshop with players of the banking industry.
D&B is the world’s leading source of business knowledge and information solutions, managing the world’s most valuable commercial database with information on 200 million business entities.