Credit Rating Agencies INBONIS in Europe and RATING® in KSA enter a cooperation agreement to spread use of credit rating for SMEs and midcaps and foster financial and commercial cooperation between their regions

Financial Analytics Co. (RATING®) and INBONIS Rating establish a commercial and technology agreement that shall make available high-quality credit ratings to over 10,000 SMEs in both regions by 2025 and increase cross-region trade and investment.

For 50 years, credit ratings have been the standard used in global capital markets to assess the creditworthiness of large corporates or governments and to make financing and investment decisions. Today, all over the world, public administrations and institutional investors are actively using credit ratings to select the SME to which they grant financial or commercial support.

Both RATING®in the Kingdom of Saudi Arabia and INBONIS in Europe are pioneering SME credit rating in their regions, and both are committed to improving SME access to long-term financing.

• Founded in 2015, INBONIS obtained approval as a Credit Rating Agency in May 2019 from the European Securities and Markets Authority (ESMA) [1]. INBONIS works with tier-1 European financial institutions and is the market leader in its geographies in a number of credit ratings issued, with over 700 SME and midcaps rated.
• Founded in 2022, Financial Analytics Co. (RATING®) obtained approval as a credit rating agency in August 2022 from Capital Market Authority, KSA. As the first independent local rating agency in the region. Rating already exceeds 350 Rating companies in KSA in less than a year since inception.

The cooperation agreement has a double focus: (i) commercial cooperation to promote credit rating across regions and (ii) licensing of INBONIS’ core technology, REFOCAL®, to RATING® in order to enhance its capabilities to serve a growing demand in KSA.

• Commercially, each of the Agencies will promote the use of SME credit rating as a tool for economic development and SME growth. In such an endeavour, each agency might invite the other to events in their respective regions in order to get exposure in the investor community with the objective of promoting credit rating as the right tool for filling the gap of asymmetry of information in the SME segment.

• On the technology side, INBONIS will be licensing its core rating technology REFOCAL® to RATING®. REFOCAL® is a compliant-by-design software that encapsulates a validated SME credit rating methodology and an efficient credit rating process. It enables to offer of best-in-class corporate credit rating services with prices, terms, and processes adapted to the needs of SMEs and midcaps

 “It is my honour to me personally and to the Financial Analytics (RATING®) team to align with the INBONIS team and its founder Alberto who I share with his values and vision of improving the Rating industry and making a serious positive impact using the most advanced technology and ideas toward helping SMEs in specific and corporates in general. FA Rating strategy fully aligns with Vision 2030 of KSA to enable SMEs to get the right advice and products from financial analytics (Rating). Also, to open borders for companies between our region and Europe market in coordination with INBONIS” Nabil Al-Mubarak, founder & CEO at Financial Analytics Co. RATING®.

“It is an honour for us to work with Nabil and his team, with whom we share a vision of financial markets and a strong ambition to provide high-quality, affordable credit ratings to thousands of SMEs. So, sharing our core technology REFOCAL® and know-how has been an easy choice. We also expect this partnership to help increase commercial and investment flows between Europe and KSA for the good of European SME” – Alberto S. Navalpotro, founder & CEO at INBONIS and Regional Ambassador for Europe at SME Finance Forum.

About RATING®: Financial Analytics Co. (RATING®) is a Credit Rating Agency in the Kingdom of Saudi Arabia. Registered and supervised by the Saudi Capital Markets Authority (CMA), The RATING agency was established as the first leading independent local rating company in The Kingdom of Saudi Arabia. We are devoted to providing accurate, timely and prospective opinions that are built on a strong foundation of independent thinking, rigorous analytics and a balanced approach. Our existence as a key enabler in the financial sector supports and promotes the development of effective financial markets across the region. Our resolve lies in our ambition to pursue excellence in all spheres of our operations.

About INBONIS S.A.: INBONIS is the Credit Rating Agency for SMEs in Europe. Registered and supervised by the European Securities and Markets Authority (ESMA), INBONIS holds ECAI status[2]. INBONIS is a pioneer in SME credit rating in Europe and a market leader in terms of the number of companies rated. INBONIS works with tier-1 financial institutions (state-owned financiers, commercial banks and asset managers) and with hundreds of issuers. INBONIS’ credit ratings are being used to deploy over 25Bn€ of public funding to SMEs. INBONIS is generating a positive impact for its rated companies in terms of access to finance (65% of them have obtained long-term finance after 6 months of being rated) and financial management/education (52% of them have improved their credit rating notch within 2 years). With corporate offices in Madrid (Spain) and in Paris (France), INBONIS is an active member of trade associations SME Finance Forum and Paris Europlace.

[1] https://www.esma.europa.eu/press-news/esma-news/esma-registers-inbonis-sa-credit-rating-agency. In Europe, only CRA can issue credit ratings according to the CRA regulation. The aim of the CRA Regulation: enhance the integrity, responsibility, good governance and independence of CRAs to ensure quality ratings and high levels of investor protection.

[2] EBA Final Report on the mapping of ECAIs’ credit assessments. ECAI (External Credit Assessment Institutions) are recognized by the European Banking Authority, which means that its credit ratings can be used by financial institutions and insurance companies to estimate their regulatory capital requirements according to EU regulation.