Written by The Banking Post
Bangladesh is moving to modernise its financial sector by allowing private credit bureaus for the first time. The Bangladesh Bank has issued Letters of Intent (LoIs) to five firms, giving them a year to set up infrastructure before receiving final licences.
The selected firms are Creditinfobd (UK-backed), TransUnion (US-backed), First National Credit (US-Saudi-backed), City Credit (sponsored by City Bank), and bKash Credit (sponsored by bKash). TransUnion and bKash will form a joint venture.
Private credit bureaus will compile borrower information from banks, financial institutions, mobile financial services, and other platforms to create credit scores using artificial intelligence and machine learning. These scores will help lenders assess risk, cut default rates, and expand access to credit—particularly for individuals and small entrepreneurs who are often excluded from the formal system.
Currently, the only credit reporting body in Bangladesh is the central bank’s Credit Information Bureau (CIB), which maintains records of existing borrowers of banks and non-bank financial institutions. This leaves millions of potential borrowers, including micro and small businesses, outside the system.
“Licensed credit bureaus will create accurate borrower profiles, making it easier for people to access loans from both local and foreign institutions. Strong credit ratings will help lower interest rates, while weaker ones may carry slightly higher costs,” said Fahmida Khatun, executive director of the Centre for Policy Dialogue. She added that strict safeguards are needed to protect personal data and prevent misuse.
Ali Ahmed, chief commercial officer of bKash, said the initiative will benefit millions of mobile financial service users who currently lack credit histories. “Customers’ payment behaviour will form their credit profile, enabling them to access bank loans, instalment facilities, or even rental agreements,” he said.
The Bangladesh Bank invited applications for private bureaus in March after issuing guidelines in mid-2024. Investors must form limited companies with at least Tk10 crore in paid-up capital and directors with strong banking and technology expertise.
The guidelines emphasise data security, requiring customer consent before information can be shared. Sensitive information such as deposit balances cannot be disclosed, but payment records, loan performance, and utility bill histories may be used to assess creditworthiness.
Experts believe the move will make lending more transparent and efficient, reduce nonperforming loans, and encourage digital lending. It could also open up new financing opportunities for cottage, micro, small, and medium enterprises (CMSMEs), a sector often starved of credit despite its role in driving growth.
