MICROCAPITAL BRIEF: International Finance Corporation (IFC) Commits Technical Assistance To Indian Credit Bureau, High Mark

The International Finance Corporation (IFC), the private investment arm of the World Bank Group, recently agreed to provide technical assistance to High Mark, an Indian credit bureau, in an effort to encourage microfinance lenders in India to use credit bureaus in assessing the repayment capacity of borrowers. The goal of the commitment is to lower credit risk for lenders and protect borrowers from over indebtedness. According to Ajay Kohli, High Mark’s Chief Executive Officer, “With IFC’s support, we will develop new products and channels over the next 18 months that will help our member microfinance institutions comply with regulatory requirements, contribute quality data, and make effective use of bureau services.” High Mark also expects to add an additional 50 clients to its lender network under this partnership. IFC Manager for Access to Finance in South Asia Jennifer Isern remarked, “IFC’s strategy is to help develop a sustainable microfinance sector. The credit bureau will help institutions offer services responsibly and help integrate low-income microfinance customers into the formal financial sector.”

The current project builds on an earlier project under the auspices of the International Finance Corporation (IFC) Global Credit Reporting Program which provided advisory services on the development of credit reporting infrastructure in developing countries through feasibility studies, legal and regulatory advice, long-term coaching and research. IFC partnered with the US-based Omidyar Network to launch Microfinance Institution (MFI) Credit Bureau project in India in June 2009. Working closely with Microfinance institutions network (MFIN) and existing credit bureaus, the effort facilitated the start of about 45 MFIs reporting to credit bureaus with 55 million client records having been uploaded as of 2011.

By Chioma Okwudiafor, Research Associate

About International Finance Corporation (IFC)
The International Finance Corporation (IFC), a member of the World Bank group, offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2011, IFC has 182 member countries, total assets of USD 68.5 billion and USD 12.2 billion mobilized to 518 projects.

About High Mark
High Mark is a private credit information bureau founded in 2007 and licensed by the Reserve Bank of India in 2010. Several financial institutions and technology partners have invested in High Mark through direct equity participation including the State Bank of India, Punjab National Bank and Small Industries Development Bank (SIDB), Edelweiss and Shiram City.  Information about the size of clientele base and borrower register of HighMark is not available.

Sources and Additional Resources:

IFC Press Release: IFC Helps India’s High Mark Strengthen Credit Reporting to Expand Microfinance Lending
http://www.ifc.org/IFCExt/pressroom/IFCPressRoom.nsf/0/BAF8B82A4E8AD46C85257AA6001FB725?OpenDocument

Microfinance Focus Story: December 12, 2011, “IFC to expand microfinance credit bureaus coverage in India”
http://www.microfinancefocus.com/ifc-expand-microfinance-credit-bureaus-coverage-india

MicroCapital Universe Profile: International Finance Corporation (IFC)
https://www.microcapital.org/microfinanceuniverse/tikiindex.php?page=International+Finance+Corporation+%28IFC%29

MicroCapital  Story: September 12, 2012, “MICROCAPITAL BRIEF: International Finance Corporation (IFC) Backs Central Registry of Securitisation Asset Reconstruction and Security Interest (CERSAI) of India”
https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-backs-central-registry-of-securitisation-asset-reconstruction-and-security-interest-cersai-of-india

MicroCapital Story: July 14, 2011, “MICROCAPITAL BRIEF: Credit Information Bureau India Limited (CIBIL) to Launch Credit Reporting System for Microfinance”
https://www.microcapital.org/microcapital-brief-credit-information-bureau-india-limited-cibil-to-launch-credit-reporting-system-for-microfinance/

MicroCapital Story: March 15, 2011, “MICROCAPITAL BRIEF: Microfinance Institutions Network (MFIN), High Mark to Launch Credit Bureau in India”
https://www.microcapital.org/microcapital-brief-microfinance-institutions-network-mfin-high-mark-to-launch-credit-bureau-in-india/

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