In Focus Risk
Finding the information to make progress
During and after lockdown – what steps should you take to get accurate credit data?
Cynthia Gebeily Head of credit reporting, Cedar Rose
Cynthia.Gebeily @
cedar-rose.com
The global pandemic has caused widespread panic throughout the global business community, and quite rightly so. With so many companies forced to close
their doors, furlough employees or let them go, it has been exceptionally difficult for credit managers to chase debts, contact customers or even get accurate credit reports. The International Committee on Credit
Reporting and the World Bank issued guidelines for policymakers on credit reporting so that borrowers’ creditworthiness or credit scores would be protected from undue harm due to their inability to pay during the COVID-19 pandemic. This could be argued to obscure the
reality for lenders and creditors and make credit scores and the information in credit reports seem unreliable. It was perhaps a necessary step in
countries where systems are fully automated – because automation relies on patterns of behaviour and machine learning and does not cope well when the environment is so dramatically changed. In some countries, even the registries’
websites were down for a period of time which created a lack of sources to validate the registration data of companies incorporated in those countries. Cedar Rose became the ‘go-to’ agency to provide instant KYC checks online in the Middle East and Africa, due to our extensive coverage of companies in the MENA region and the fact that our service was uninterrupted due to our successful business continuity planning.
July 2020
The new normal So what is the new normal in the credit reporting industry and how can you get accurate credit information at a time of such rapid change? Our teams have been using the latest
technology to keep our data on the MENA region updated, as well as now offering global coverage online. However, we would recommend that credit professionals base their decisions on freshly investigated report for the foreseeable future, these include: l Updated information from the local commercial authorities. l Telephone interview to confirm the real operational status of the company. l Feedback on how affected the company has been by the pandemic. l A trade reference providing a trade supplier’s opinion on payment performance. l An updated CR Score (credit score) calculated using the latest information. We also recommend adding annual
monitoring to receive timely notification of any critical changes made to the company’s credit file such as change of ownership, address, legal form, and status. It should be noted that monitoring of companies in developing countries is not usually based on live feeds from the registers, so instant notification is not available in the same way, but a company that does thousands of fresh investigations in the country and regularly updates their data automatically will be the best available option, alongside frequent contact with your customers. Knowing the physical location and
contact details for companies is essential, as
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In some countries, even the registries’ websites were down for a period of time which created a lack of sources to validate the registration data of companies incorporated in those countries
well as having up to date information on who the directors, shareholders and ultimate beneficiary owners are in case there is a need for asset tracing or debt collection. For this reason, we now provide live
links in online credit reports at our website
www.cedar-rose.com to show how many other companies a director or shareholder is connected to. We have seen a dramatic increase in requests for directorship and shareholding reports and asset tracing during the lockdown period. CCR
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