Firms urged to embrace rating

Financial companies, especially insurance companies, have been called on to embrace the rating system as one way of attracting investments in the country. Credit rating is the way of auditing the company to evaluate and assess the worthiness of a company.The advice was given at the ongoing meeting of insurers gathered in Kigali at Serena Hotel. Stanislas Zeze, the Director General of Bloomfield Investment Corporation, one of the few rating companies in Africa, said: “Rating is another invitation to investors, it does not stop defaulting but it reduces the risk and rated companies will always have better offers.”Zeze cited corporate and financial rating, institutional and quality of worthiness among the forms of ratings.Rated companies are seen as more credible because it shows transparency and good governance, he said.He noted that some companies can decide to request for ‘white’ rating whose report cannot be published until they decide when to publish it.“The system is not well known in Africa but it can facilitate us to develop our financial market,” Zeze said. Bayo Folayan, from Nigeria, observed that rating system has been operational for eight years in Nigeria but few companies submit for rating.“We don’t appreciate the importance of rating and many companies are still growing because you have to be sure of your company before rating,” Folayan said.Folayan added rating improves performance and professionalism and builds confidence especially when the rating is good.Amb. Claver Gatete, the Governor of the Rwanda central bank, BNR, said many local banks are being rated but insurance companies are yet to embrace rating.“We just concluded self assessment of insurance in the EAC and Rwanda did well, we are building our insurance industry by applying international norms,” said Gatete.The three-day meeting, which ends today, drew insurers from across the continent. It was held under the theme ‘Insurance and financing in the Federation of African National Insurance Companies (FANAF countries’.

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Firms urged to embrace rating