RIYADH: The Saudi Credit Bureau (Simah) and the Bahrain Credit Reference Bureau (Benefit) have signed an agreement to share credit information. It is the first cross-border exchange of its kind in the Middle East and North Africa region.
The Saudi Credit Bureau (Simah) and the Bahrain Credit Reference Bureau (Benefit) have signed an agreement to share credit information. It is the first cross-border exchange of its kind in the Middle East and North Africa region.
The bilateral agreement follows a decision by the Gulf Cooperation Council (GCC), during its 37th session in 2016. This approved the exchange of credit information among member countries with the aim of improving the quality of credit portfolios, reducing credit risks, setting maximum limits on credit-granting periods, and introducing guidelines for the ratio of loans to assets and the relationship between credit volume and the value of collateral.
It also seeks to strengthen the supervisory roles entrusted to government regulating bodies and other related parties to protect the financial sector from the risks of improper financing practices, and to provide an efficient and reliable information infrastructure.
Simah CEO Suwaid Al-Zahrani, who cosigned the agreement with Benefit CEO Abdulwahed Al-Janahi, thanked King Salman for supporting the project, which he said will promote transparency in the credit-information sector.
“The exchange of credit information between the two countries aims to address and reduce credit risks and provide new tools that will enable financiers, and all related stakeholders, to extrapolate financial behaviors and make sound financial decisions,” said Al-Zahrani.
He also thanked the Saudi Arabian Monetary Authority, the Central Bank of Bahrain and the GCC for their support for the initiative and assistance with legislative and regulatory frameworks.
“The agreement between Simah and Benefit is a result of the development of the rules of the GCC banking and finance regulations, which will contribute to the activation of the GCC common market through several aspects, including equal treatment in the public and private sectors, the ownership of real estate, investment and service, trading and buying shares, establishing joint-stock companies, and intra-GCC trade,” Al-Zahrani added.
Al-Janahi said the importance of credit information stems from a need for the development of financial systems, and the creation of effective systems for the collection and analysis of credit information that increases the efficiency of financing operations.
