Credit Ratings System for Malaysian SMEs
Credit Guarantee Corp Malaysia Bhd (CGC) sets out to make MyScore (Malaysia Standard Credit Rating Evaluation) widely recognized. Over the next three to five years, CGC will be actively promoting and educating business owners on the credit rating system.
What is a Credit Rating System?
A typical credit ratings system for companies include a comprehensive assessment of financial performance, management competence, industry factors and trends, relative performance within the industry and relationship strenght with suppliers and customers. It is designed to assess the credit worthiness of the enterprise.
Why is a Standard System Important?
A standard credit rating system for SME means that it will be more efficient in distributing financial assistance to the most efficient companies and at the same time reducing non-performing loan. It also encourages companies to be more efficient as they strive to improve their credit ratings.
Introduced in the middle of 2014, MyScore assesses the SME’s financial strength and capability to honour business obligations and provide an insight into its financial performance and assessing the risk element in order to rate the SME overall creditworthiness. The credit rating system encompasses a credit score, credit grade and probability of default – measured on the levels of the company and on the individuals.
Apart from promoting and providing education on MyScore, CGC will also provide advisory services to improve the SMEs’ credit standing over time, thus enabling more loans to be given out in the next few years to boost the contribution of SMEs to the Malaysian economy.
More information … TheSunDaily
November 24, 2014 / /
Categories: loan news