x Abu Dhabi, UAESunday 21 January 2018

Emcredit to launch UAE credit reports

The company plans to release indicators on trends related to credit risk and employment later in the year.

Emcredit, a credit information agency based in Dubai, plans to launch quarterly market and credit-related economic reports focusing on the UAE this summer, the firm said Sunday. Its first report, on historical patterns of business registration in the UAE, is in its final stages. The company plans to release indicators on trends related to credit risk and employment later in the year. Analysts say Emcredit's reports could be crucial for banks and investors in the UAE, where regular economic and financial statistics are scarce.

"Initially, Emcredit will be producing reports that reflect general economic trends in commercial company registration, commercial concentration according to industries, business classification and geographic location in Dubai and Abu Dhabi," said Zaid Kamhawi, the chief business officer at Emcredit. "Other reports will look into macro-credit trends." Emcredit, which was established in 2006 by the Dubai government's Department of Economic Development, was the country's first independent credit information company. It brought government and financial institutions together to collect better data on lending activity in the UAE.

While the precise nature of the indicators Emcredit plans to release remains unclear, reliable data could help banks make better-informed lending decisions and provide much needed transparency to the credit market. "It would have been better if such data was released earlier to help protect the lenders, but it is never too late to force transparency in the marketplace," said Ali Khan, the managing director at Arqaam Capital in Dubai.

"There should be more specific details on credit market in consumer and commercial debt. Specific details in any asset class helps and, in this case, consumer credit details are more important considering banks' exposure to it." Federal efforts are already under way to streamline the release of credit information. The Federal National Council in March passed a draft law that made a credit check mandatory for any borrower seeking to raise funds in the UAE.

The draft of the Credit Information Law, which is still awaiting approval by the Supreme Council, will allow a new federal credit information company to regulate gathering, analysis, use and protection of credit data on corporations and individuals. Analysts have been calling for credit-market indicators to be made available to the public after banks came under stress because of the financial crisis.

"Such economic indicators and trends, when backed by accurate data and tracked regularly, can greatly support the decision-making process of policy makers, law enforcement authorities, lenders, commercial entities, as well as enhance the confidence of foreign investors," said Ali Ibrahim, the managing director of Emcredit. "Being an aggregator of information places us at the heart of the system, enabling us to provide timely and credible information in an unbiased manner."

shamdan@thenational.ae skhan@thenational.ae