IT traders to get credit ratings

Dubai Computer Traders' Group (DCTG), a non-profit organisation of the emirate's IT retailers, has launched an initiative to check growing incidences of fraud within the industry.

At its general assembly yesterday, DCTG launched a credit rating system and a code of ethics to encourage IT organisations to work only with partners who are members of the group.

To restore confidence among the large IT community in Dubai, the group also called for stricter and concerted action against defaulters. It said credit fraud was a major issue facing the UAE's computer and IT industry and many organisations were badly hit when defaulters fled the country.

The credit ratings start from A for a member providing basic information to A+++ for a highly credible organisation providing maximum information. Additionally, DCTG's membership norms will also undergo a complete overhaul, with members being accepted into the group after a rigorous screening process and being continuously reviewed by the credit ratings system.

DCTG President Shailendra Rughwani said: "The credit ratings system is a step in the right direction. It will help our members, distributors, vendors and international suppliers identify the most credible partners to do business with and safeguard their organisations against fraud. With this system in place, members will be careful about making sure that their reputation remains intact in the market."

The screening process involves cross-checking a potential member's credentials, collecting information about the member, including personal data from his home country and family details. Membership is approved only after DCTG's examiners are confident that an applicant can add value to the group, and after all information is proved to be credible.

The rising number of default cases has shaken up the region's IT industry and Rughwani pointed out that fraud cases recorded so far this year are the highest in 15 years. As a result, total losses this year are currently estimated at Dh19 million, with the past three weeks alone seeing frauds committed amounting to Dh14m.

Mohamad Jomaa, Emcredit's Business Development Manager, Commercial, said: "Sharing credit and payment experiences can create a favourable trading environment. Credit bureaux help industry groups manage common risks through collective efforts."

Following the DCTG's implementation of the credit rating system, banks and insurance companies will also be in a better position to lend or insure IT companies who are members of the DCTG and enjoy reputable credit ratings.

Formed in 2007, DCTG currently has a core of 150 members and total membership is expected to reach 500 shortly.

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