LAHORE (PR) - The Pakistan Microfinance Network (PMN) launched the Microfinance Credit information Bureau at Avari Hotel on Friday. Governor SBP Syed Salim Raza launched the bureau by conducting the first transaction/query on the system. Pakistan is amongst the few countries where a specialized MF credit bureau is being established. A credit bureau is a key step towards a responsible financial system. It is a perfect example of public private partnership between the industry represented by the Pakistan Microfinance Network, the State Bank of Pakistan and the Pakistan Poverty Alleviation Fund This initiative has been supported by donors like Department for International Development (DFID) through UK-AID and Citi Foundation. The guests at the launch were welcomed by Dr. Rashid Bajwa, the chairperson for PMN and Syed Mohsin Ahmed, the CEO of PMN. Syed Salim Raza lauded the efforts of PMN to bring uniformity and stability to the microfinance sector by developing systems that ensured that the capacity for error was minimized. Dr. Bajwa mentioned, PMN is aware that the sector has stalled and there has been no growth in outreach of credit services, but this is because of multiple factors - chiefly non availability of funding for the sector. He also stated that there have however been a lot of new initiatives including the Microfinance Guarantee facility and the Institutional Strengthening Fund launched by SBP under the UK AID financial inclusion plan. The Program for Sustainable Microfinance for providing commercial debt through guarantee facility by the Pakistan Poverty Alleviation Fund and the setting up of consumer codes and credit bureau by PMN. Syed Mohsin Ahmed said, The need of the time seems to be the development of impartial structures that serve the microfinance sector and its clients without bias. The Microfinance Credit Information Bureau will contain data on each client of each Microfinance Provider (MFP) to ensure that overlapping of loans is restricted and the lender is able to analyze the debt capacity of the clients. He added that this initiative was part of PMNs objective to facilitate MFPs and the clients by making the industry as responsible as possible. Other areas where PMN is active is developing consumer codes, ensuring implementation and monitoring of codes, setting up of a grievance redressal system where clients can lodge complaints to a neutral body of noted and respectable elders and analyzing social outcomes of microfinance interventions. The credit bureau will serve as a centralized database to store all past and present credit transactions of all borrowers. This would not only help MFPs have appropriate risk management systems while allowing them to speed up the processes of approval and disbursement but will also ensure that clients are not able to borrow from multiple sources and thus prevent them from facing over-indebtedness. It will provide the clients credit profile, contain demographic information to ensure groper identification, include pertinent information relating to th~creditworthine55 and ability of an applicant to repay newly established credit. MFPs will be able to screen out (if policy pro nibits multiple loans) multiple borrowers, but also to choose to provide multiple loans as it wou~d be in a position to assess the risk in each case and factor in this risk, accordingly. Syed Mohsin Ahmed was highly grateful to the PMN donors DFID through UK-AID and Citi Bank through the Citi Foundation Network Strengthening Program that funded this bureau. The technology partner for the initiative, DataCheck also presented the lessons they have learnt from setting up the Microfinance Credit Information Bureau and the way forward with the initiative. PMN and PPAF signed a Memorandum of Understanding under which the Pakistan Poverty Alleviation Fund will continue to facilitate MFPs in providing data to the MF CIB.