Cibil rural borrowers? database to help MFIs

Credit Information Bureau (India) Ltd, a repository of credit information, is preparing the database of rural commercial and consumer borrowers to cater to the growing demand of microfinance institutions.

The database is aimed at providing information mainly about multiple lending to rural consumer borrowers. According to industry estimates, MFIs in the country have managed to provide finance to over 2.2 crore poor rural households. While the total outstanding MFIs in the country is around Rs 30,000 crore, defaults are in the range of 1-1.5%.

?Going forward, the biggest challenge for microfinance institutions will be multiple lending. Sooner or later they will require database containing payment history of a borrower,? said Arun Thukral, managing director of Cibil. Cibil, a joint venture of TransUnion, Dun and Bradstreet, banks and financial institutions, has signed an agreement with a

consortium of 31 MFIs in the country.

?Moreover, once the microfinance institutions shift towards banking, they will require such a database,? said Thukral.

Almost 80% of funds are disbursed through profit-oriented MFIs, which are registered with the Reserve Bank of India as NBFCs. Such institutions are not allowed at present to use the banking system to lend loans. ?We have started test marketing the product and it will be available within this fiscal,? he added.

Meanwhile, Cibil is also preparing a product where individual borrower can access his credit and payment history, which was so far restricted to financial institutions only.

?We have a product called Direct-to-Customer, where a consumer borrower can access his own cre-dit and payment history,? he said.

Although the service is operational but the borrowers can not pay online at present to receive credit and payment history.

?We are receiving more than 1000 applications every day where a consumer is asking for his credit and payment history. We are working on the electronic gateway platform. Once complete, consumers will have the provision to pay online for the reports,? Thukral said.