Mizzima Business Weekly
Myanmar’s first credit bureau to help improve access to credit for people and businesses
Micro, small and medium enterprises and consumers in Myanmar are expected to benefit as a result of a new credit reporting system which has been officially launched by the Myanmar Credit Bureau (MMCB), according to a press release.
The new credit reporting system by MMCB, the country’s first ever credit bureau, will allow financial institutions in Myanmar to access borrowers’ credit history, evaluate loan risks, and make lending decisions more quickly, ultimately benefitting people seeking credit for personal or business reasons.
MMCB was established with the support of IFC, a member of the World Bank Group. The credit bureau — pooling information from various types of creditors and public data sources on potential borrowers — will expand access to finance for consumers and small businesses in Myanmar. Accurate and timely credit information will further allow financial institutions in Myanmar to reduce risks, loan processing times, operating costs, and default rates.
“As MMCB starts operations, it marks a new beginning for the country’s financial system, especially at a time when people and small businesses are grappling with the challenges of a COVID-19 economy,” said Than Than Swe, Director General of the Central Bank of Myanmar (CBM). “MMCB is the outcome of our long-term engagement with IFC to catalyze financial inclusion and strengthen Myanmar’s financial sector. We appreciate IFC’s continued support during these challenging times as we make efforts to recover our economy after the pandemic.”
As part of its bid to help more people and businesses gain access to financing for businesses and households, MMCB has already signed agreements with major commercial banks. MMCB aggregates credit data so that lenders can verify clients, assess their creditworthiness, and evaluate their repayment capacity. The credit bureau aims to offer services to all financial institutions in Myanmar. Apart from credit reports — a statement with information about a borrower’s credit activity and current credit situation — MMCB will develop value-added products such as credit scoring and new transaction alerts.
“As the first credit bureau in Myanmar, we aim to provide complete and comprehensive solutions to banks and non-bank financial institutions. We also provide industry benchmark data and reports to the Central Bank of Myanmar for better supervision and policy formulation to improve the quality of domestic credit portfolios and maintain financial sector stability,” said Zaw Lin Aung, Chairman of MMCB. “The MMCB is going to support individuals and MSMEs in terms of easier access to finance by offering consumer and commercial credit reports. As per guidance and supervision from the authorities, we are also going to extend our membership programs to other stakeholders so that all lenders can make the well-informed credit decisions and mitigate systematic credit risk.”
IFC has been supporting Myanmar’s financial sector to create a modern credit bureau using international best practices and its extensive experience of developing credit reporting systems in over 90 countries.
“The formal operations of Myanmar’s first ever credit bureau marks a significant step forward in helping more people and small businesses, especially those owned by women, gain access to finance they need, which is especially critical now given the impact of COVID-19,” said Jane Yuan Xu, IFC’s Country Manager for Myanmar and Thailand. “IFC is also working with the Central Bank of Myanmar and the credit bureau to educate people and lenders on the important issue of financial protection for people seeking access to finance.”
IFC has been working with the CBM since 2014 to implement regulatory reforms and establish an enabling environment for credit reporting. The assistance to Myanmar on credit reporting development has been made possible with the support of the United Kingdom’s Foreign, Commonwealth and Development Office (FCDO).