When a company ask for Credit
Report on another company or a bank ask for Credit Report on a
borrower, such a request is never a Credit Rating request. Company
Credit Report is not the same as Credit Rating. Company Credit
Report is also practically different from the kind of credit report
produced by a typical credit bureau organization.
Professional credit management
consulting companies that supply company credit report are different
from “Credit Bureau” organizations which requires
license to operate. There exist clear distinctions between services
offered by credit bureau firms and companies that supply the traditional
credit report on companies. This differentiation between the activities
of Credit bureau organization and an independent company credit
report company has been dealt within the CBN’s blueprint
on credit bureau operation in Nigeria.
The Credit Bureau authorization
and procedural license as stipulated by the Central Bank of Nigeria
does not include organizations which provide the typical and conventional
company Credit Report. This I am very well aware of because, I
was a stakeholder representing Nigeria’s national body for
credit management (The Institute of Credit Administration (ICA))
at one of the credit bureau policy sensitization meetings called
by the CBN in 2008. I have details of the resolution of those
meetings. I was a strong participant.
Both Local and International business
players rely heavily on independently prepared company credit
report to appreciate business standing, credibility and reputation
of an organization they desire to do business with. In Nigeria,
however, most people are completely un-aware of the critical role
which Company Credit Report plays in business and credit decision
process. Company Credit Report speaks largely for a company on
which it is prepared than the company attempting to speak for
itself. Also, independently prepared Credit Report on a company
seeking creditline or business engagement complements internal
operation of the lending institution as well as exerting the burden
of transparency on internal credit analysis and approval process
of the key staffers.
The decision to do business or
not to do business with another organization has always been partly
derived from a Credit Report on company; likewise the decision
to invest in or not to invest in a project of a company has always
been partly tied to a Credit Rating on the subject matter.
As an information, the Credit
Business Services Global Limited (CBS Credit) is a highly respected
international organization providing objective, independent and
impartial credit report on companies around the world with clients
including U.S Embassy Commercial Section, Delegation of German
Industry and Commerce in Nigeria, KPMG, UK, Control Risk Group,
UK, Creditreform, Germany, Halliburton, etc.
Both Credit Rating and Credit
Report on any entity requires that such entity must provide needed
information about itself. Such information will now become subject
of analysis and, also serves as guide to requesting for more and
more information as in the case of credit rating. Only in credit
bureau’s type of credit report would one see a “teaser
kind of information”. It’s usually one or two pages
report and of course, it focuses more on the subject’s record
and history of credit defaults.
