Selling on credit is a fundamental requirement in today’s economy. Most companies can’t compete unless they can offer credit terms. Unfortunately, too many credit customers treat credit terms as if they were interest-free, perpetual loans. Their tactic is to drag out payment as long as possible.
The commercial sector in Kenya has marked a new and important development with the launch of Veri-Credit Trade Sector Bureau. The newly formed company is a membership-based organisation that focuses on solving cash flow problems by providing access to non-performing credit information to its members.
Veri-Credit intends to promote best credit practices between businesses and their suppliers, to improve cash flow between businesses and to drive a change in payment performance culture with a time-proven method of significantly increasing its cash flow resulting in higher profitability
The exclusive analytics platform, available on both web and mobile apps, provides valid and verifiable payment experiences enabling proactive credit risk information not available from any other source.
How Veri-Credit works
Many companies today are faced with the problem of having accumulated credit balances owing to accounts receivables thus compounding their cash flow and profitability often resulting in employee lay-offs to sustain sufficient cash flow to maintain minimum operations.
The domino effect of this is a substantial reduction in tax revenue derived from corporate and personal tax contributions. Veri-Credit aims to assist commercial enterprises to significantly improve their cash flows by providing information for proactive decision making in credit management whilst substantially reducing its member’s bad debts.
Stephen Mills, Director, Veri-Credit said “The creation of Veri-Credit TM is an important addition to Kenya’s financial system. We aim to drive a significant change in the payment culture to bring about considerable benefits to all trade sectors with proven credit risk management practices, contributing to a substantially increased cash flow and subsequent profitability for our members whilst enhancing the safety and soundness of our Kenyan economy.”
“With respect to payments and receivables, the lack of trade credit information availability has until the launch of Veri-Credit remained a major challenge as until now, there is nothing to deter a credit customer from delaying payment to sustain their own.
Consequently, Veri-Credit Trade Sector Bureau fulfils the critical need by offering a nationwide information network that serves effectively as a “credit bureau” for commercial trade payables and receivables (DSO),” added Mr Mills.
The Veri-Credit system follows a closed user group model that allows only its members to anonymously exchange DBT (Days Beyond Terms) credit payment performance information on the compliance of credit terms by their customers. Such a credit information network enables Veri-Credit members to quickly distinguish slow-paying customers or defaulters from those that pay within credit terms whilst using Veri-Credit as a powerful means to leverage repayment from defaulters.
Najma Dadar, Managing Director, Veri-Credit, added “There has been growing public awareness of the need for commercial companies to have greater access to credit data. Our aim is to encourage and promote best credit practices between businesses and their suppliers and to significantly improved cash flow. Veri-Credit will help meet the needs of both.”
Speaking on the launch of the company, Kelvin Ngaruiya, Veri-Credit Business Development Manager, said “Veri-Credit, with its best in class technology platform, talented team, excellent range of products aims to assist members improve their cash flow while maintaining excellent customer relations. We look forward to changing the payment performance culture in Kenya.”