By Roubeeni Mohan

CTOS Data Systems Sdn Bhd (CTOS) recently launched the CTOS SME Score to empower Small and Medium Enterprises (SME) with the confidence to make quick, consistent and objective decisions as they assess the businesses and owners to whom they will potentially extend loans, leases and trade credit.

The solution serves to drive SME growth in Malaysia by providing an easy and universal assessment of creditworthiness for SMEs to get the best terms and offers from potential creditors and other SMEs.

Datuk Ong Eng Bin, CEO of OCBC Bank Berhad; Dennis Martin, Group CEO of CTOS Holdings; Kristine Ng, CEO of Peoplender Sdn Bhd signing MOUs at the launch of the CTOS SME Score

“Knowledge creates confidence,” said Dennis Martin, Group CEO of CTOS. “With the launch of the CTOS SME Score, we are bringing this confidence to SMEs in Malaysia. By providing access to a single point of SME credit reference at a glance, the CTOS SME Score allows businesses to make credit decisions within minutes rather than several days.”

“In an increasingly congested SME financing segment, we also anticipate that the quick turnaround time and comprehensive access to data offered by the solution will be the trigger point for SME decision-makers when looking for financing,” he further added.

The CTOS SME Score is a three-digit representation of an SME’s credit risk, ranging from 100-400, developed in partnership with FICO, a global leader in analytics and developer of the de facto standard for credit scoring in the United States.

With the advent of this solution, all Malaysian businesses working with SMEs on credit terms now have access to a standard rating scale and a single point of reference, in which to assess an SME’s financial position and generate individually tailored credit decisions.

The CTOS SME Score is able to provide updates on an SME’s current financial standing, allowing for pre-emptive action to be taken against potential bad debts or late payments.

To reduce SMEs exposure by flagging high-risk customers in an existing portfolio, the CTOS SME Score is also able to generate business leads by identifying potential customers.

Pre-screening of potential customers will improve prospecting, sales and operational efficiency. SMEs will also be able to use the CTOS SME Score to quickly and accurately ascertain a customer’s creditworthiness and thus provide better turnaround times on credit decisions in the current competitive economy.

Currently, there are almost a million SMEs in Malaysia contributing 37 per cent to the national gross domestic product and that figure is expected to rise to 41 per cent by 2020.

SMEs also make up 98 per cent of local businesses and create employment for two-thirds of all working Malaysians.

However, unlike larger businesses, SMEs often lack large cash reserves, nor do they typically enjoy unobstructed cash flow, essential factors to any businesses’ long-term success.

SMEs typically have less cash on hand to manage operations, pay employees and ultimately grow their business.