May 23, 2018

Myanmar Has its First Credit Bureau

Myanmar Central Bank approved Myanmar Credit Bureau Limited to serve as a credit bureau, a gap needed for SMEs to have access to financial services as well as for the banks to give credit to SMEs, on May 17.

Myanmar Credit Bureau Limited will serve as mediator between banks, non-bank financial institutions, and other financial organizations. It will provide information on paying off debt by individuals, organizations, and other related information to the debtors.

The announcement came out within a week after U Myint Swe, Vice President, said the cabinet decided to establish a credit bureau that will enable SMEs to have loans without any collateral, at UMFCCI on May 11.

Establishing a credit bureau will help overcome the collateral obstacle facing SMEs that discourage them from accessing financial services. The bank, using the information provided by the credit bureau, will assess the borrowers’ reliability. This will strengthen access to financial services for SMEs, the Central Bank said in its announcement.

“Having a Credit Bureau can prevent fraud,” Dr. Hla Nyunt, Deputy Managing Director of Global Treasure Bank, said.

In other developed countries, banks have easy access to information of the SMEs’ details and history, financial statement, how they get credits and how they repay the debt. In Myanmar, SMEs need to meet a lot of requirements, such as collaterals and recommendations, U Phyo Min Thein said.

Myanmar Credit Bureau Limited is a joint venture between Myanmar Banks Association and Singapore based NSP Holdings, a company with experience in the field. They later changed the company’s name to Asian Credit Bureau Holdings. The joint venture received the approval from Directorate of Investment and Company Administration last year.

Source: Myanmar Business Today