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Credit Rating

The Committee for Private Education (CPE) requires all PEIs to meet minimum credit rating requirements for renewal of registration under the Enhanced Registration Framework (ERF).

Credit Rating Requirements

The date of the credit rating report should be within 6 months before the expiry of the ERF registration period.

The descriptor for each credit rating band by CPE and the corresponding ratings by the appointed credit rating service provider[1] are:

Band Descriptor Rating by Dun & Bradstreet (Singapore) Pte Ltd
Band 5 Possesses extremely strong financial fundamentals with above average capability for meeting payments. Negligible credit risk. CA1
Band 4 Stable financial health. Capable of meeting commitments, although may be susceptible to difficulties in the event of drastic changes in economic conditions. CA2
Band 3 Adequate financial capabilities to meet normal commitments. However, adverse changes in economic conditions could lead to doubtfulness in its ability to pay. CA3
Band 2 Weakness in financial ability is apparent. Likely to fall into a weakened financial condition with unfavourable changes in the economic and operational environment CA4
Band 1 Apparent weakness in financial health with limited capability to meet its obligations. CA5

Renewal of registration under ERF

PEIs must have at least a Band 2 credit rating to renew their ERF registration period for two years. PEIs must have at least a Band 3 credit rating to renew their ERF registration period for at least four years.

Applying for Credit Rating

PEIs may choose to apply for credit rating with one of the agencies appointed by CPE[1]. The financial records submitted by PEIs for credit rating should:

a) Include the most recent three consecutive years (except for new start-ups of less than three years);

b) Include financial records related to the education services provided; and

c) Exclude financial records from affiliated business or parent companies/groups.

PEIs would be required to re-do their credit rating assessment if they are found to have furnished an incorrect set of financial records to the agency. PEIs may wish to consider engaging the services of certified accountants in preparing their financial records so that they meet the required financial reporting standards. This would facilitate the credit rating process.

All costs incurred in applying for credit rating will be borne by the PEI.

[1] CPE-appointed credit rating service provider and their contacts are available via “List of CPE-appointed Credit Rating Service Provider”.