In a landmark move for the country’s financial sector, the central bank has granted preliminary approval to five private entities to establish credit bureaus, aiming to bring greater transparency and competition to Bangladesh’s lending market stated in a report.
The newly approved bureaus include ventures backed by both local institutions and foreign investors. Among the key players are City Bank, mobile financial service provider bKash, and US-based credit reporting giant TransUnion. Two additional firms have also received the green light to enter the market.
According to the central bank’s guidelines, private credit bureaus will assess the creditworthiness of individuals and businesses by analyzing borrower data and sharing credit histories with financial institutions. This will help lenders make better-informed decisions, reduce information gaps, and improve access to finance for borrowers, particularly small businesses and individuals.
Industry experts believe the introduction of private credit bureaus will reduce loan default risks and ultimately help bring down average interest rates, leading to stronger lending standards across the financial sector.
Under the new regulatory framework, approved entities must be registered as limited companies with a minimum paid-up capital of Tk 10 crore. Each bureau can have a maximum of 11 directors, with at least two possessing over a decade of banking experience and two more with expertise in technology-related fields. Foreign investors are permitted to hold stakes, but no individual can serve as a director in more than one bureau at the same time.
The central bank first introduced detailed guidelines for private credit bureaus last year under the Payment and Settlement System Act, 2024. These guidelines are designed to ensure fair competition and safeguard borrower information while creating a more transparent financial ecosystem.
With preliminary approvals now in place, it is expected that the first private credit bureaus will take shape within the next year, ushering in a new era of credit evaluation and lending practices in Bangladesh.
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