Under the arrangement with IAP Integrated, RAM said on Wednesday it would conduct credit assessment and assign a credit rating to each venture prior to its listing on the IAP.
“Similar to many fintech platforms such as equity crowd funding and peer-to-peer lending platforms, IAP facilitates direct investment by investors into viable ventures of their choice,” it said.
IAP is a strategic initiative within the Islamic finance industry to operate the investment account (IA), a new product offering by Islamic banks.
RAM had on Wednesday inked an agreement with IAP Integrated Sdn Bhd to provide the independent credit ratings.
The ratings agency said the platform was developed by Raeed Holdings Sdn Bhd (Raeed), a consortium of six Islamic banks namely, Affin Islamic, Bank Islam, Bank Muamalat and Maybank Islamic, Bank Kerjasama Rakyat and Bank Simpanan Nasional.
Under the arrangement with IAP Integrated, RAM will conduct credit assessment and assign a credit rating to each venture prior to its listing on the IAP.
The credit ratings from RAM provide potential IA investors with an independent, third-party opinion on the credit risk of the underlying venture.
“RAM’s role in IAP is to provide an independent view on the creditworthiness or likelihood of the venture in meeting full and timely payment of expected profit and repayment of principal. This would require us to take into account factors beyond the track record of the entrepreneurs concerned, including industry risks and the viability of the proposal itself,” said RAM Holdings group CEO Datuk Seri Dr. K. Govindan.
“We will leverage on RAM’s extensive experience in rating bonds and sukuk to deliver our credit opinions on the ventures.”
“Given RAM’s over 25 years of track record in credit ratings across various industries and geographies, it is well-positioned to conduct independent assessment on ventures listed on the IAP,” said IAP Integrated CEO Mohamed Izam Mohamed Yusof.
“RAM’s rating methodology is also familiar to most investors, which is a plus point in supplementing their investment decision making process,” he said.
IAP Integrated is a unot of Raeed Holdings Sdn Bhd to develop and operate a multi-bank platform known as the Investment Account Platform (IAP).
IAP is a multi-bank platform that will allow investors to view and choose from a wide range of ventures sponsored by different Islamic banks for the investors to invest in.