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).

 ??  ?? Photo: EPA
Photo: EPA

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