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Supermarket failures prompted setting up of Association of
Credit Management
by Blanche Gatt
The recent supermarket failures as well as a spate of bounced
cheques convinced businesses to cooperate in the setting up
of the Association of Credit Management, the association’s
President, Geoffrey D. Borg, told The Malta Business Weekly
in an interview. Mr Borg said the recent upheavals left in the
wake of bad credit decisions finally prompted local companies
to shelve their suspicions and cooperate for the benefit of
all. “Finally it was felt that like other management disciplines,
such as accounting or marketing, there was a strong need for
a local association in line with international trends, which
would focus and advance the requirements of a credit manager
in the local market. One can see that we have been somewhat
lagging from an international perspective,” he said.
Mr Borg said that while attempts had been made in the past to
set up some form of information exchange between companies who
sell
on credit, “the worry of local businesses that competitors
could use this information for their advantage has always been
a stumbling block in the past.”
Mr Borg said the fast developments in the commercial sector
and a strengthening of credit legislation and enforcement are
the primary factors for the huge interest in the Association,
adding that “the initial members are a mix of a number
of business sectors but predominantly FMCG (fast moving consumer
goods) and the automotive sector”.
Setting up a Credit Rating System to facilitate the exchange
of credit information on customers between companies who sell
on credit will mean companies will be able to access the history
of a potential client through the Secretariat of the Association.
This information would then help them choose whether or not
to extend credit to people with a bad track record. “For
example,” said Mr Borg, “a com-pany that sells cars
will do a search on a new client, find out that he’s a
reliable customer, or that he has a string of bounced cheques
or unpaid bills behind him and make their decision to extend
credit based on these facts. Of course, this will never eliminate
risk completely, but this service will definitely give creditors
a sounder platform from which to take decisions.”
The Association of Credit Management is a group of leading Maltese
companies with a market turnover of over Lm200,000,000 who sell
on credit in a variety of commercial sectors. The companies
together employ over 4000 people.
The Association was launched on 1 June and its objectives include
the provision of a central national organisation for the promotion
and protection of all credit interests pertaining to local businesses;
to foster and facilitate the exchange of credit information;
to encourage efficient service in the collection of amounts
due; to promote economy and efficiency in the handling of estates
of insolvent, distressed or bankrupt debtors and to promote,
support of oppose any legislative or other measures which affect
the aforesaid interests represented in these and other developments.
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