Microfinance Institutions Network (MFIN), a self-regulatory organisation of the Indian microfinance sector, has launched a Credit Bureau initiative in collaboration with High Mark Credit Information Services Ltd, to provide client data to its members.
The network, which represents 46 per cent of the Reserve Bank of India (RBI)-approved NBFC-MFIs which claim to cumulatively account for over 80 per cent of all micro-credit activity in the country, has uploaded data on 28 million loan accounts so far, said Alok Prasad, CEO, MFIN.
The arduous task of collating data for about 30 million borrowers and uploading it onto a common data format could not have been possible without the support and co-operation of member MFIs. The industry is unanimous in its view that dedicated credit bureaux for the sector will bring enormous transparency at the client level and will help curb multiple lending, said Prasad.
The credit bureau would help the MFIs to determine repayment behaviour of the client by providing repayment history of the clients. For the clients, a clear repayment history would bring in credibility and thus enable them to borrow at lower rates based on strong repayment history, he added.
A fully functional credit bureau for the microfinance industry is expected to be operational by April, 2011, said the organisation.
MFIN was established in October 2009 and has developed a code of conduct for its members which emphasises transparency and fair practices, added Prasad.
