​​It is very rare, if nothing at all, to find a business without a myth. In credit reporting industry, myths are almost identical from US market to Nigeria one. Certain myths are attributed to real practices in the market; complexity of the business; poor or absent educational programs and multiple key stakeholders with different objectives. Saudi Credit Bureau (SIMAH) has the same story with the same myths in different tales and different market.

Unlike fictional ghosts and goblins, SIMAH is very real and inextricably tied to financial health. However, there are plenty of misconceptions out there about what SIMAH does really and what are the impacts of credit reports. This blog goes over the Top 5 Myths about SIMAH:

Contrary to the wide misconception, SIMAH is owned by 10 national banks. Before 2002, credit information capturing was carried out by Saudi  Central Bank (SAMA). That was until mid of 1990s when the idea of establishing a new credit bureau started. In 2002,10 banks agreed to establish SIMAH with clear vision of contributing to the finance growth and economic sustainability and objectives of reducing credit risks in Saudi market; eliminating information asymmetry; expanding lending processes based on world best practices and predicting consumers' financial trends based on their historical behaviors.

Since day one, SIMAH has clarified its neutrality in the entire relationship between lenders and borrowers. SIMAH has nothing to do with final decisions of its members being positive or negative. Credit reports provided by SIMAH don't whatsoever direct explicitly and/or implicitly members to take any decisions. Such reports provide comprehensive, accurate and updated credit information. It is SIMAH's member who decides to grant loans or decline them. More than 82 million credit reports provided by SIMATI (consumer reporting system) and SIMAT (commercial reporting system) since May 2004 till December 2018 without siding with neither borrowers nor lenders. SIMAH's credit report does not determine the approval or denial of consumers' credit requests. Rather, the credit report simply presents available credit information without offering any opinions or recommendations regarding the decision to grant or deny credit. A member may grant the consumer credit even if he/she is defaulted on previous loans and, alternately, they may deny him/her credit even if he/she has never been defaulted.

SIMAH's neutrality isn't a choice; it is mandatory stated in both Credit Information Law and its Implementing Regulations issued by SAMA.

A blacklist is a rundown of people or associations that are punished in light of the fact that they are accepted to take part in financial unfavorable or unethical activities. A blacklist might be kept up by an entity, ranging from a small business enterprise to an inter-governmental body. Before the emergence of SIMAH in Saudi market in 2002, there was a blacklist with its consequences. Yet, credit reporting reciprocities contradict the principles of blacklisting. The latter is a sudden decision taken because of financial breaching of whatever type; credit reporting traces behaviors not as out of the blue incidents but rather as consumers' decisions. Not all decisions are wise and right; yet not all them are wrong neither. Blacklisting is judgmental with long term consequences while credit reporting is objective. Financial sector regulators and supervisors worldwide have shown a strong preference for sourcing the data they need from credit reporting service providers (CRSPs) as well as from other types of centralized credit databases, rather than relying on ad hoc, unstructured data requests to the regulated/supervised entities. A key reason behind this is that integrated reporting mechanisms like those of CRSPs normally ensure higher data quality and better overall usability of such data, in addition to greater efficiency. Box 1 provides a description of the main types of CRSPs, i.e. credit registries, credit bureaus and commercial credit reporting companies. Thus, the era of blacklisting has gone forever with SIMAH credit reporting products and services.

It is by law that any SIMAH's member shall have a consent for making a new enquiry of the consumer. SIMAH's member, being a bank, a finance provider etc, is obliged to have the consumer approval for accessing his credit information; providing all credit information needed and sharing them with all SIMAH's members.

Some believe that credit information contained in the credit report are generated principally by SIMAH; this is a myth. It is the member of SIMAH who provides such data and by default it the member who updates them. SIMAH members are responsible for updating consumers' credit information in an organized and periodic manner. The updating period differs for each SIMAH member. However, members are required to update consumers' credit information regularly at least once per week. Not only that but also members cannot add negative credit information that has been removed from or amended in the consumer's credit report without the approval of the Committee.  

• Create a sound financial market for business and decrease default in repaying borrowed money.
• Increase the likability of distributing credit in the local market in more efficient method.
• Strengthen prudential supervision capacity through the use of credit information data.
• Diversify credit products on a competitive basis.
• Reduce the information asymmetries between lenders and borrowers.
• Trace all bankrupt cases and reflect them in credit reports.
• Support financial providers in assessing the risks accompanying granting loans. 
• Enforce regulation on financial provider and increase level of supervision upon credit providers to ensure stable and safe financial system.
• Assess the credit worthiness and make precise decisions.
• Lower the cost of data sharing for creditors.
• Promote the development of full file or positive and negative reporting.
• Enable comprehensive credit reporting and the inclusion of data from financial and non-financial institutions, such as retailers, utilities, and telecoms, insurance, education and manpower sectors.
• Coverage of retail, microfinance, and SME sectors.
• Encourage the development of financial education offered through the bureaus themselves.

• 137,168,844​ Million reports issued.
  
• 21,168,192 Million customers.
  
• 87,689,301 Million CI's.
  

(Saudi Credit Bureau) SIMAH is the leading credit bureau in the MENA region, serving individual consumers, small businesses and large corporations with a full range of credit and financial and risk management products and services.

Established in 2002, and operating since 2004 SIMAH has issued more than 104 million credit reports since 2004 with data quality score of 99.4%. Serving over 17.2 Million customers and having over 63 Million CI's, SIMAH is the largest credit bureau in the MENA region offering industry-leading product and services like SIMAT (Business Solutions), SIMATI (Consumer Solutions) and Value-Added Services (VAS) to cater to business and consumers alike.

SIMAH offers integrated solutions in the domain of analytics and decisioning with its subsidiary QARAR making it the first bureau linked analytics company in the region. MOARIF (The Legal Identifier), SNTR (SIMAH National Trade Repository) and TASNIF (SIMAH Rating) are also managed and operated by SIMAH ensuring vertical and horizonal integration of services.

SIMAH head office is based in Riyadh and can be reached on www.simah.com