CIBIL launches Company Credit Information Reports
Business entities can now access their credit report directly from CIBIL to see where the company stands in the financial life cycle and identify critical areas that need improvement to further enhance its credit worthiness and improve the eligibility for financing.
Mumbai, July 6, 2011– While companies’ credit information reports have been available to banks from CIBIL for over 5 years, CIBIL has announced the availability of these reports to companies themselves for र 2,500. This service will enable businesses of all sizes to review the information that is being used by lenders to evaluate their loan and credit line applications.
A Company Credit Information Report (CCIR) is a month-on-month record of a company’s debt related exposure and payments. The CCIR captures cash credit, overdraft facilities, loans of all maturities, bank guarantees, letters of credit, packing credit, deferred payment obligations, forward contracts and any other debt exposure that a company has incurred. This information is captured for sole proprietors, partnership firms, limited and public limited companies.
Currently, CCIRs are widely used by lenders like banks and non-banking financial institutions in order to evaluate the ability of companies to bear additional debt. The availability of the CCIR to business entities in India will result in improved increase in transparency in what has otherwise been a relatively opaque operating environment.
Given the widespread use of the CCIR by lenders, business entities can now purchase their CCIR and view the information that a lender will review before approving their loan application. Not only does this help a business entity increase the chances of their loan approval – by better understanding where their company stands in the financial life cycle – but also provides an opportunity to detect and correct any discrepancies that are present in the CCIR.
Secondly, an indirect but invaluable benefit is the fact that the CCIR can be used to evaluate the viability of a potential business partner. It is always beneficial to understand the obligations your potential business partner is under, especially when doing business on credit. Most businesses have debt and business credit exposure (payables). The CCIR provides you with a complete snapshot of a business’ debt exposure. This is invaluable for sole proprietors and small businesses that don’t have access to formal information networks like large corporations do. The CCIR provides reliable factual information at a nominal cost.
Business entities can access their own credit report for र 2,500 by completing an online application form available on CIBIL’s website. Valid Identity Proof, Company’s Address Proof and a Duly Signed Letter from an Authorized Signatory need to be attached to the payment receipt generated online and then mailed to CIBIL to process the request.
Speaking on the development Mr. Arun Thukral, Managing Director, CIBIL said “I envision CIBIL’s Company Credit Information Report introducing increased clarity and transparency in to India’s business landscape. In the near future, a company’s credit report along with its accounting financials will become the standard of its financial strength and hopefully facilitate more trust and better business terms between businesses. CIBIL will be providing reputational collateral to companies that will help them on both sides of the balance sheet by building business relationships via increased transparency and facilitating access to business credit.” Speaking on CIBIL’s Commercial Bureau he added, “CIBIL’s Commercial Bureau was instituted to provide lenders with credit information pertaining to businesses in order to enable lenders to make more prudent lending decisions, enhance asset quality and improve credit flow to the SME and business sector”.