Credit Policy Template for Qatar

A Credit Policy sets clear rules for how a Qatari business handles lending money, extending credit, and managing customer payments. It guides decisions about which customers can receive credit, how much they can borrow, and what happens if they don't pay on time - all while following Qatar Central Bank guidelines.

Good credit policies protect companies by reducing financial risks and maintaining healthy cash flow. They include specific criteria for credit checks, payment terms, and collection procedures that align with Qatar's Commercial Code. Banks, retail stores, and service providers in Qatar use these policies to make consistent, fair decisions about customer credit.

Implement a Credit Policy when your business starts offering payment terms, loans, or any form of credit to customers in Qatar. This becomes essential as your customer base grows and you need consistent rules for approving credit applications, setting credit limits, and managing payment terms.

Many Qatari businesses create or update their Credit Policy before expanding into new markets, launching credit-based products, or when facing increased payment defaults. It's particularly crucial for companies regulated by the Qatar Central Bank, businesses with high-value transactions, or those dealing with international customers where payment risks are higher.

• Credit Note Policy: Focuses specifically on rules for issuing credit notes and refunds to customers, common in retail and service businesses regulated by Qatar's tax authorities. Most Qatari businesses adapt their Credit Policies based on industry needs - banks use comprehensive lending policies, retailers focus on payment terms and credit limits, while B2B companies often include trade credit evaluation criteria and international payment terms aligned with QCB guidelines.

• Finance Directors and CFOs: Create and oversee Credit Policy implementation, ensuring alignment with Qatar Central Bank regulations and company risk tolerance
• Credit Managers: Handle day-to-day policy enforcement, credit assessments, and customer limit decisions
• Sales Teams: Must understand and follow credit terms when negotiating with customers
• Legal Department: Reviews policy compliance with Qatari commercial law and updates terms as regulations change
• Customers: Both businesses and individuals who receive credit must comply with the established terms and conditions

• Risk Assessment: Review your business model and identify credit risks specific to your Qatari market segment
• Regulatory Review: Gather current Qatar Central Bank guidelines and relevant commercial laws
• Payment Terms: Define standard credit limits, payment deadlines, and late payment penalties
• Evaluation Criteria: List specific requirements for credit approval, including financial documentation needed
• Collection Process: Map out clear steps for handling overdue payments and defaults
• Documentation: Our platform generates a compliant Credit Policy template, ensuring all essential elements meet Qatar's legal requirements

• Credit Assessment Criteria: Clear standards for evaluating creditworthiness under Qatar Central Bank guidelines
• Credit Limits: Specific formulas and maximum exposure levels per customer category
• Payment Terms: Detailed payment schedules, grace periods, and late payment consequences
• Default Procedures: Steps for handling non-payment aligned with Qatari debt collection laws
• Data Protection: Rules for handling customer financial information under Qatar's privacy laws
• Governing Law: Explicit reference to Qatar jurisdiction and applicable commercial codes
• Review Process: Procedures for periodic policy updates and compliance checks

A Credit Policy differs significantly from a Credit Agreement. While both deal with financial arrangements, they serve distinct purposes in Qatar's commercial landscape.

• Scope and Purpose: A Credit Policy provides company-wide guidelines for managing all credit relationships, while a Credit Agreement is a specific contract between two parties for a single credit arrangement
• Legal Enforceability: Credit Policies are internal governance documents that guide decision-making, whereas Credit Agreements are legally binding contracts enforceable under Qatar's Commercial Code
• Content Focus: Credit Policies outline evaluation criteria, risk management procedures, and general terms, while Credit Agreements specify exact loan amounts, interest rates, and repayment schedules
• Duration: Policies remain active until formally revised by the company, but Agreements expire once the credit terms are fulfilled or the specified period ends