Credit reports issued by Saudi Credit Bureau (SIMAH) summarize the extent of consumers' creditworthiness for members and enable them to identify their behaviors and determine the levels of risks associated with their credit dealings so as to come to sound decisions. SIMAH's credit information is used as indicators for financial firms (SIMAH's members) that measure the risk tolerance, the level of profitability required, the quality of their credit portfolios and the diversity of credit risks and their limits. The relationship between SIMAH and its members is based on high governance standards stipulated in Implementing Regulation approved by Saudi Central Bank ( SAMA)

Transparency and good corporate governance are the cornerstones of a strong lending system and corporate sector , according to Principles issued by World Bank . Transparency exists when information is assembled and made readily available to other parties and, when combined with the good behavior of "corporate citizens," creates an informed and communicative environment conducive to greater cooperation among all parties. Transparency and corporate governance are especially important in emerging markets, which are more sensitive to volatility from external factors. Without transparency, there is a greater likelihood that loan pricing will not reflect underlying risks, leading to higher interest rates and other charges. Transparency and strong corporate governance are needed in both domestic and cross-border transactions and at all phases of investment: at the inception when making a loan, when managing exposure while the loan is outstanding, and especially when a borrower's financial difficulties become apparent and the lender is seeking to exit the loan. Lenders require confidence in their investment, and confidence can be provided only through ongoing monitoring, whether before or during a restructuring or after a reorganization plan has been implemented. From a borrower's perspective, the continuous evolution in financial markets is evidenced by changes in participants, in financial instruments, and in the complexity of the corporate environment. Besides traditional commercial banks, today's creditor (including foreign creditors) is as likely to be a lessor, an investment bank, a hedge fund, an institutional investor (such as an insurance company or pension fund), an investor in distressed debt, or a provider of treasury services or capital markets products. In addition, sophisticated financial instruments such as interest rate, currency, and credit derivatives have become more common. Although such instruments are intended to reduce risk, in times of market volatility they may increase a borrower's risk profile, adding intricate issues of netting and monitoring of settlement risk exposure. Complex financial structures and financing techniques may enable a borrower to leverage in the early stages of a loan. But sensitivity to external factors, such as the interest rate environment in a developing economy, may be magnified by leverage and translate into greater overall risk. From a lender's perspective, once it is apparent that a firm is experiencing financial difficulties and approaching insolvency, a creditor's primary goal is to maximize the value of the borrower's assets in order to obtain the highest debt repayment. A lender's support of an exit plan, whether through reorganization and rehabilitation or through liquidation, depends on the quality of the information flow. To restructure a company's balance sheet, the lender must be in a position to prudently determine the feasibility of extending final maturity, extending the amortization schedule, deferring interest, refinancing, or converting debt to equity, while alternatively or

Transparency increases confidence in decision making and so encourages the use of out-of-court restructuring options. Such options are preferable because they often provide higher returns to lenders than straight liquidation through the legal process—and also because they avoid the costs, complexities and uncertainties of the legal process. In many developing countries it is hard to obtain reliable data for a thorough risk assessment. Indeed, it may be too costly to obtain the quantity and quality of information required in industrial countries. Still, efforts should be made to increase transparency

Credit information provided by SIMATI and SIMAT, SIMAH's two advanced consumers and commercial credit reporting systems, assists Members to define the types of credit that can be granted to their clients and determine the sectors and geographical areas that can be granted credit. SIMAH's wide range of products and services enable members also to establish credit management sound  policies and procedures , rules for approval of granting credit and the foundations for obtaining information  along with diversifying their credit products based on their clients' credit behaviors. 

Total number of credit reports extended by SIMATI and SIMAT to the Saudi market increased drastically by 41  percent from 13 million credit reports at the end of 2018 to more than 19 million credit reports at the end of 2019. Total number of members also went up by 7 percent from 319 at the end of 2018 to 342 at the end of 2019. Coverage of consumers in SIMAH shows its huge technological infrastructure where total number of consumers raised up by 11 percent to more than  17 million consumers at the end of 2019 against 15 million consumers at the end of 2018.

 SIMAH helps its members to reduce information asymmetry ; work in accordance with  Responsible lending ; reduce collateral requests ; measure and price the underlying risk of an account objectively thereby minimising lending risks ; gain better understanding of the credit history of customers ; increase ability to diversify  products and create innovative services;  process credit applications easier, faster, cheaper and with more control and consistency and  Enhance credit risk management practices in line with global best practices.

Investment in emerging markets is discouraged by the lack of well-defined and predictable risk allocation rules and by the inconsistent application of written laws. Moreover, during systemic crises, investors often demand uncertainty risk premiums too onerous to permit markets to clear. Some investors may avoid emerging markets entirely despite expected returns that far outweigh known risks. Rational lenders will demand risk premiums to compensate for systemic uncertainty in making, managing, and collecting investments in emerging markets. The likelihood that creditors will have to rely on risk allocation rules increases when the fundamental factors supporting investment deteriorate. That is because risk allocation rules set minimum standards that have considerable application in limiting downside uncertainty but usually do not enhance returns in non-distressed markets (particularly for fixed-income investors). During actual or perceived systemic crises, lenders tend to concentrate on reducing risk and risk premiums soar. At these times the inability to predict downside risk can cripple markets. The effect can impinge on other risks in the country, causing lender reluctance even toward untroubled borrowers.

• Collecting and exchanging credit information.
• Creating an effective financial infrastructure able to support sustainable economic growth.
• Increasing lender and investor confidence.
• Enabling credit providers to form a clear image of prospective borrowers by providing them with borrowers' credit history, improving their ability to determine financial solvency and to assess credit risk.
• Gathering financial and non-financial variables from consumer credit reports to be inputted into complex predictive models in order to determine the credit risk posed by an individual/corporation. This acts as tool in the assistance of credit providers and lenders in their efforts to predict consumers' borrowing behaviors during the lending decision process.
• Reducing disparities in credit information, through a reduction of information asymmetry between lenders and borrowers.  This is due to the fact that, in order to determine a prospective borrower's financial solvency, lenders depend primarily on the accuracy of available information.
• Decreasing the non-performing loan rate and increasing recovery rates, in addition to facilitating access to financing at a price that takes an accurately calculated credit risk rate into consideration.
• Supporting monetary policies and related monetary tools so that lenders are able to dynamically and accurately assess the cost of risk in cases of borrower default. This enables interest rates, one of the most important monetary policy tools, to directly affect economic behaviors, such as borrowing rates, investment and consumption.
• Improving credit quality and initiating credit expansion, thereby stimulating economic growth.

(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