Credit Bureau to Be Up and Running Next Year
By Myo Pa Pa San 12 December 2018
YANGON—Myanmar’s first credit bureau will launch its services next year, its chairman U Zaw Lin Aung said.
On Monday, Myanmar Credit Bureau Ltd signed an agreement to purchase a credit bureau software license from Equifax New Zealand Services and Solutions Ltd, a unit of the U.S.-based credit-reporting firm.
“This is our first step. Before this, we observed the way local banks maintain their credit files. We have studied the technical aspects. So we believe we will be able to provide services within nine to 12 months,” U Zaw Lin Aung said.
In May, the Central Bank of Myanmar issued Myanmar Credit Bureau Ltd a license to collect the credit records of individuals and businesses and provide them to lenders.
“The Credit Bureau will be the first agency in Myanmar to report information about loans and credit,” said Central Bank of Myanmar vice governor U Soe Thein.
The bureau will assign credit ratings to individuals and businesses based on their credit histories, and lenders will be able to use these to calculate their bad-debt risk, according to the Central Bank of Myanmar.
The bureau will help companies, especially small and medium-sized enterprises (SMEs), get easier access to bank loans, U Toe Aung Myint, the permanent secretary of the Ministry of Commerce, earlier told The Irrawaddy.
While SMEs are said to constitute some 90 percent of the businesses in Myanmar, and it is generally agreed that SME development is instrumental to national economic growth, SMEs’ access to bank loans are restricted as they have to put up collateral.
“The credit bureau will collect information about the overall performance of individual companies, so [those that perform well] may not need to put up collateral to get loans,” U Toe Aung Myint said.
The bureau will also assist the central bank by providing credit information about the whole banking sector, said U Yu Lwin, vice chairman of the Myanmar Banks Association and managing director of Myawaddy Bank.
“The [establishment of the] Credit Bureau is an improvement not only for the domestic banking sector but for all financial organizations,” he said.
The Central Bank of Myanmar will be able to better regulate local banks and adopt necessary policies in time thanks to real-time information provided by the bureau about the performance of local businesses, he added.
Myanmar Credit Bureau Ltd is a 60:40 joint venture between the Myanmar Banks Association (MBA) and Singapore-based Asian Credit Bureau Holdings.