(MENAFN - Arab News) Saudi Arabia, Kuwait and Bahrain have expressed willingness to set up a joint credit information center, local media said quoting informed sources
The application of a credit information exchange program will minimize risks on the GCC financial system as certain firms and families have been heavily involved in huge debt with some GCC banks and financing agencies, said sources cited by Al-Sharq Al-Awsat
The sources said a recent gathering of credit information centers of the GCC countries adjourned a meeting in Riyadh after some representatives failed to attend the talks for lack of technical readiness
The sources, however, said that the application of the proposed credit information exchange program could possibly be started with two or three countries and expanded to cover the remaining GCC countries in few years
In this context, the Central Bank of Bahrain has stressed the importance of application of the credit information exchange program between the GCC countries to avert possible financial risks emerging from the absence of cooperation related to credit information
The Central Bank of Bahrain has studied the mechanism whereby the program could be achieved between the GCC countries with special emphasis on legal and technical obstacles which may face the joint project, the sources said
The credit information centers in the GCC countries are awaiting the decision of the concerned central banks, the sources said.
Some lapses exist that could be exploited by some GCC nationals and companies. This necessitates the exchange of credit information to protect creditors from undisciplined borrowers, they said
In Saudi Arabia, meanwhile, Saudi Credit Bureau (SIMAH) is providing credit reports of individuals or corporates. Normally, credit reports are generated by the Credit Bureau which aggregates, organizes, and maintains consumer credit information collected from its participating members (i.e. Saudi banks) and public records.
The aggregated information is then provided in standardized format to participating members who need to assess the creditworthiness of current or prospective borrowers
Generally, the SIMAH is targeting many sectors including government funds, insurance, agriculture, automobile, telecommunications, car rentals, real estate, banking, brokerage and financial corporate, and installment and investment sector
Commenting on the project, Fahad Al-Mishari, the economic and financial expert, said the project is extremely important on the GCC economy and, if applied, would avoid banking and funding agencies risks of providing services to financially-troubled individuals or firms