Myanmar Credit Bureau, a joint venture between the Myanmar Bank Association and Singapore’s Asian Credit Bureau Holdings, will collect information on loan repayment histories and other information on borrowers and distribute the profiles to lenders such as banks and other non-bank financial institutions, the announcement said.

The move arrives a year after the CBM issued a regulations for credit-based loans and marks a step away from strict collateral requirements when applying for loans.

With credit profiles and more borrower information available, lenders will be better able to evaluate the creditworthiness of potential borrowers and improve risk assessment procedures. Ultimately, it will enable many entrepreneurs and small and medium enterprises (SMEs) to qualify for loans.

“Establishing a credit bureau is a good move as it will help increase access to finance for borrowers and help lenders gauge whether they should extend the loan or not,” said U Aung Thein, chair the Myanmar Industrial Association and SME Development Committee under the UMFCCI.

At the launch of the credit reporting regulation last year, Vikram Kumar, IFC Country Manager for Myanmar, said effective credit information sharing is a “critical first step towards interest rate liberalisation in Myanmar as it will lead to the adoption of risk-based pricing for loans.”

Apart from the license, the new Myanmar Credit Bureau will require capital of at least K3 billion ($2.2 million). It is expected to be operational within a year.

Source: https://www.mmtimes.com/news/central-bank-issues-license-myanmar-credit-bureau.html