Chennai, 1st March 2011: Microfinance Institutions Network (MFIN) announced at a press conference held in Chennai today that its Credit Bureau initiative for microfinance clients has now come to fruition. This initiative is a big step forward for bringing the microfinance industry into the mainstream and for promoting responsible lending.

MFIN represents 46 of the leading RBI registered NBFC-MFIs that, on an aggregated basis, account for over 80% of all microcredit activity in the country (excluding SHGs). MFIN has partnered with ‘High Mark Credit Information Services Ltd’ to set up a dedicated credit bureau for the microfinance sector. High Mark is an RBI approved credit bureau and has developed a platform that is uniquely designed for microfinance clients.

The credit bureau currently has uploaded data on 28 million loan accounts. The data for all 46 MFIN member MFIs is scheduled to be uploaded in the next two months. This data collection process will be an on-going one as more MFIs join the bureau.

Mr. Alok Prasad, CEO, MFIN said, “We are very proud that within the  short time-frame of about 8 months our efforts for a microfinance credit bureau have come to fruition. The arduous task of collating data for about 30 million borrowers and uploading it in a common data format ould not have been possible without the tremendous support and cooperation of member MFIs. The industry is unanimous in its view that dedicated credit bureaus for the sector will bring enormous transparency at the client level and will help curb multiple lending. Responsible lending is the mantra and the only way forward”

The credit bureau will offer many benefits for clients as well as for MFIs, such as:

1. Readily available client data will allow MFIs to determine repayment behavior and make more informed credit decisions.
2. It will also help borrowers establish repayment history, enabling them to borrow at lower rates based on strong repayment history.
3. Having authentic borrowing data for clients will help banks and MFIs avoid multiple lending to the same borrowers. This in turn will go a long way in addressing concerns of over- indebtedness of clients and consequent client distress.

As a self-regulatory organization, MFIN promotes responsible lending and client protection and it has been working on a range of initiatives focused on the robust development of the microfinance sector. MFIN has established a stringent code of conduct for its members, which underscore fair practices, good governance and responsible lending.