MFIN launches credit bureau

Microfinance Institutions Network (MFIN), a self-regulatory organisation for the Indian Microfinance industry, 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-approved NBFC-MFIs that claim to cumulatively account for over 80 per cent of all microcredit activity in the country, has uploaded data on 28 million loan accounts so far, said Alok Prasad, CEO, MFIN.

The industry feels dedicated credit bureaus for the sector would bring enormous transparency at the client level and help curb multiple lending, said Prasad.

The credit bureau would help MFIs determine repayment behaviour of clients by providing a repayment history. For clients, a clear repayment history would bring in credibility and thus enable them to borrow at lower rates, 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 on transparency and fair practices, added Prasad.