MICROCAPITAL BRIEF: Conflicting Telecom Regulations, Cumbersome Utility Account Processes Limit Impact of Credit Bureau Act on Financial Inclusion in Pakistan

Mumtaz Hussain Syed, the CEO of Pakistan-based technology consultancy Aequitas Information Services, reportedly has argued that at least two factors have reduced the effectiveness of his country’s Credit Information Bureau Act of 2015. The law requires “financial and credit institutions to…share data with at least one licensed private credit bureau.” Credit bureaux also must collect information from “non-conventional sources,” such as retailers, telecommunication firms and utilities. A problem with collecting payment data from utilities is that utility accounts are often registered in the names of buildings’ former residents. This is because, “Changing ownership [of utility accounts] is a lengthy and cumbersome process,” that people often fail to complete. A problem with collecting data from telecoms – which hold data on 130 million subscribers in the country – is that “conflicting regulations” require these firms to protect customer data from being shared. Addressing these problems could reduce microborrowing rates and increase financial inclusion.

By Jessica McLeod, Research Associate

Sources and Additional Resources

Express Tribune article
https://tribune.com.pk/story/2228053/2-pakistan-credit-firms-fail-collect-reliable-data/

Aequitas Information Services homepage
https://www.aequitas-infotech.com/

Did you know that MicroCapital publishes the MicroCapital Monitor Newspaper each month? Find out more at https://www.microcapital.org/products-page/.