Pakistan Microfinance Network to set up credit bureau

Microfinance Focus, March 15, 2010: Pakistan Microfinance Network is launching a pilot program on setting up a credit bureau for microfinance institutions and banks by the end of April 2010 in order to provide information on borrowers’ credit history and interest rate structures of loan providers.

Syed Mohsin Ahmed, CEO of Pakistan Microfinance Network, has confirmed this to Microfinance Focus. The Pakistan Microfinance Network (PMN) is a network of organizations engaged in microfinance and dedicated to improving the outreach and sustainability of microfinance services in Pakistan.

Recent instances of irresponsible lending practices like ‘weak’ screening of clients depending on the middlemen or activists, instead of direct approach and reported attacks on the staff have made the industry to look for urgent reforms required in lending practices.

“Moreover, the absence of any data-based record of borrowers at all levels has made the sector realize the need for a credit bureau. Pakistan Microfinance Network and Pakistan Poverty Alleviation Fund have already taken up this vital task which in future would help secure the sector,” said Farhat Abbas Shah of Farz Foundation.

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