Equifax Credit Information Services, the joint venture between Equifax and six leading Indian financial institutions announced the launch of a new microfinance credit bureau in India today. The bureau is aimed at supporting the efforts of financial institutions, specifically microfinance institutions (MFIs), to provide financial services to un-served and underserved segments of the Indian population.
Reserve Bank of India’s recently accorded priority sector status to MFIs. New regulatory guidelines along with credit information provided by bureaus like Equifax will help MFIs lower the rates of delinquency and control over-indebtedness feels the company. It will also help MFI customers establish their credit history in the process.
"Equifax has a long tradition of being very active in helping the communities they serve," said Samir Bhatia, MD and CEO of Equifax India. "We are very excited to be able to leverage our global expertise in microfinance to play a critical role in the ecosystem helping rural consumers. With the Equifax microfinance credit bureau in place, consumers who may have otherwise been unable to obtain assistance can now establish their credit history and obtain funding to continue their ventures," added Bhatia.
Welcoming the launch, Alok Prasad, CEO, Microfinance Institutions Network (MFIN), said: “A dedicated credit bureau for microfinance clients is a big step forward in bringing the microfinance industry into the mainstream and for promoting responsible lending. The industry is unanimous in its view that dedicated credit bureaus for the sector will bring much needed transparency at the client level and will help curb multiple lending. Responsible lending is the only way forward.”
“Establishing a credit bureau that supports information sharing, leading to informed credit decisions for MFIs is an important priority for the International Finance Corporation (IFC) and India,” says Colin Raymond, credit bureau and risk management advisor, South Asia, IFC. “Such financial infrastructure is critical to help address the pressing issues of over-indebtedness and multiple borrowings among rural borrowers. We are pleased to see real progress being made with the launch of a credit bureau, which will lead to significant improvements in access to credit for the microfinance sector in India,” added Raymond.
