By leveraging Experian’s Myanmar ecosystem, which includes financial institutions, Telenor Myanmar is aiming to help those who do not have bank accounts gain access to credit otherwise only available to those with a banking history.
Experian, in turn, has developed an algorithm pre-qualifying unbanked Telenor Myanmar subscribers using each subscriber’s data purchasing history and profile.
The technology provides lenders with a basis against which it can provide unbanked subscribers with access to credit.
For example, Experian will help Telenor Myanmar facilitate pre-qualifications of individuals in the securing of up to US$1000 in micro-financing and credit cards with spending limits of up to US$1000, at no cost.
The move comes after Myanmar has experienced rapid growth in mobile phone and internet penetration, with adoption rates having soared to 90 percent in recent years.
Under those circumstances, “our partnership with Experian will become the very first of its kind and will enable financial institutions to reach out to the millions of unbanked subscribers,” said Amaresh Kumar, chief marketing officer of Telenor Myanmar.
For Experian, the collaboration represents an important step for it to gain a foothold in a country where only 26pc of the population has access to banking facilities and credit.
This creates challenges for individuals who want to set up and operate small businesses, obtain a credit card or simply pay daily expenses or fund their children’s education.
“For Myanmar’s financial institutions, alternative data such as telco data can lead to quality and tailored pre-qualified leads, facilitating quicker assessment of an applicant and [increasing] customers. Our aim is to improve financial inclusion in Myanmar through the use of alternative data,” said Dev Dhiman, Experian’s managing director for Southeast Asia and emerging markets.
The move also arrives at a time when the authorities are raising efforts to help firms and entrepreneurs gain access to the funds they need for growth.
In fact, the partnership between Experian and Telenor came just days before the Myanmar Credit Bureau Ltd signed an agreement with US-based Equifax New Zealand Services and Solutions Ltd on December 10 to establish the country’s first credit bureau, or loan data centre.
With a credit bureau in place, information on borrowers’ credit records is expected to be made available to the banks, enabling them to make better decisions on lending and reduce default risks.
Similarly, borrowers with their accounts and paperwork in order will be able to enjoy quicker and easier access to funds.
Myanmar Times understands though, that it could take years for the credit bureau to collect and process sufficient data required by the banks before any lending can take place.
In the meantime, the Central Bank of Myanmar (CBM) is expected to release a five-point directive including guidelines on lowering local interest rates, making it more affordable for firms to take loans in Myanmar. Currently, banks pay an 8pc interest rate on deposits and charge 13pc for loans. The Central Bank rate is 10pc.
The directive may also include further guidelines on providing loans without collateral, said U Soe Thein, deputy governor of the CBM.
Source: Myanmar Times
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