Biz Guard’s bid to introduce new credit risks mitigation concepts for banks and financial institutions in UAE

History of events of credit defaults by entities from the trading sector has generally been a discouraging factor for the financial sector to engage in financing, which is a sheer opportunity loss for both the sectors as the trading sector contributes to a fairly large part of the country’s GDP. Envisioning the expected positive impact of Expo 2020 in future will further bring promising opportunities of business growth for all players in the country and as well as in the Middle East region. Such growth entails the need to facilitate the building of better financing environment for benefits of both the financial and trading sectors.

While extending working capital credit facilities, banks and financial institutions don’t feel satisfied with the current collateral support and look for additional mitigating solutions to get the risk of payment default fully covered or even more than fully covered through liquefiable or easily cashable assets given under the charge of banks and financial institutions. Making such a collateral support really effective is often quite challenging for financial institutions.

Having identified gaps currently existing in the market due to practices followed by many banks and financial institutions, Biz Guard offers to act as an independent agent for banks and financial institutions providing professional services under the spectrum of credit risks mitigation solutions. Such solutions cover aspects like due diligence and background check on borrowers, supervision, control, and surveillance of pledged goods and ongoing verification of process of goods conversion into cash and trade debtors upon events of sales and purchases and as well as the much-needed verification of borrowers’ trade receivables.

“The company acts as an independent agent for the benefits of the financial sector as it looks to eliminate any possibility of conflict of interest which might unwittingly crop up among borrowing entities while dealing with banks whether it relates to information dissemination or physical control of collateral,” said Azhar Tasadduq, CEO of Biz Guard.

“On the other hand, our services will also provide an opportunity to the business houses to get funding with relative ease from banks and financial institutions by offering better collateral/security coverage solutions, which hitherto were not being looked into by the financial sector,” added Tasadduq.

“Biz Guard has already pitched its services to a number of banks in the UAE and the concept has received appreciation from different parties as a positive move and value addition towards better collateralization of financing against pledge of commodities. And now there is a need of putting the concept into organized common practice in UAE for overall economic growth and business development of financial and trading sector alike,” stressed Bilal Usmani, Managing Director, Biz Guard.