CIBIL has entered into an agreement with 31 microfinance institutions to set up a microfinance credit information bureau
Credit information company, Credit Information Bureau (India) Ltd (CIBIL) on Thursday said that it has entered into an agreement with 31 microfinance institutions (MFIs) to set up a microfinance credit information bureau.
These MFIs are part of the Micro Finance Institutions Network (MFIN), which was set up recently as a self-regulatory organisation of MFIs, it said in a release.
"The establishment of Micro Finance Credit Information Bureau is a vital step towards inculcating financial discipline among the borrowers of micro-loans and will increase credit penetration," CIBIL's managing director Arun Thukral said.
The credit bureau will help promote responsible lending and enable MFIs to assess the credit worthiness and current exposure levels of loan applicants, Mr Thukral said.
Quoting a CRISIL report, CIBIL said that the Indian microfinance sector is estimated to comprise around 120 million households that translate into a credit demand of Rs1.20 trillion.
"MFIs already serve over 25 million customers who have no documented credit history. The task of tracking the credit history of such large numbers is challenging. By supporting this initiative, CIBIL will be participating in a nation-building effort," MFIN chairman Vijay Mahajan said.
Currently, CIBIL has a database of over 155 million records and a member base of over 200 financial institutions. Its major shareholders include SBI, HDFC, Dun & Bradstreet and TransUnion.