India: Cibil waits for Aadhar to rate microfinance customers
The proposed credit rating for customers of microfinance institutions (MFIs) seems to have hit a dead-end as the Credit Information Bureau of India Ltd (Cibil) is finding it challenging to provide the rating due to non-availability of identification tags of the customers.
“There are no IDs available for these MFI customers. We need a unique ID that can be tracked throughout the country. If there is a ration card number that is unique only in the state limits. With the deficiency in finding a unique ID, we are still grappling with the issue,” Arun Thukral, managing director of Cibil, said.
There would be a need to design a separate process to track these customers and look for a common ID, he said.
“May be the Adhaar number, whenever it is available, would be a unique ID for the customers. But, for now, we are not able to take it much forward,” he said.
For its ratings, Cibil depends on a common identity of the customers and uses PAN number as a string to identify and rate borrowers. Banks and institutions upload the data of their existing customers to the bureau and other institutions can access the data while providing loans.
About 45 million records of MFI customers have been so far uploaded into the Cibil database.
Meantime, Thukral said the bureau was developing a risk index for corporates. The bureau would not get into credit rating, but only handle the index part, based on the existing credit history with the institutions.
“It is still at a concept stage. We plan to provide an index on a scale of one to five for corporates. The exact modalities are being worked out,” he said. Banks and other financial institutions can use the index when any company seeks loans.
By KV Ramana, Daily News & Analysis