IFC, a member of the World Bank Group, is helping the Maldives Monetary Authority establish the country’s first
credit information bureau to create a formal mechanism for sharing credit information and making more informed credit-related decisions.
IFC’s support to the Maldives Monetary Authority, which regulates local financial institutions, will enhance capacity of the country’s financial sector and create a formal credit culture. This will help improve access to finance for more than 2,500 small and medium enterprises, supporting their livelihoods.
The Maldivian financial sector has an important role to play, although there are limited formal mechanisms for credit providers to share information of their past borrowers. Existing practices lack appropriate levels of objectivity, are costly, and time consuming, especially for small-value credit exposures.
“IFC’s advice in preparing a business plan and its support during the bureau’s startup phase is highly valued,” said Neeza Imad, Executive Director, Maldives Monetary Authority. “As part of this new initiative, IFC will review our legal and regulatory framework for an effective world-class credit bureau and support the implementation process.”
IFC has been working with the Maldives Monetary Authority and Ministry of Finance since 2007 to assess the technology readiness of main banks to support a state-of-the-art credit registry and to help prepare a five-year business plan for creating the registry. The registry’s development was funded by the Asian Development Bank.
The Maldives Monetary Authority’s request for IFC to help establish a credit information bureau came soon after IFC submitted the results of its study assessing the need and market readiness for sharing credit information.
Per Kjellerhaug, IFC Regional Manager, said, “Creating a financial infrastructure that supports informed credit-related decisions and improves access to credit for small and medium enterprises is an important priority for IFC and the Maldives. Establishing a credit information bureau, will help the country get closer to achieving this goal.”
In the Maldives, IFC’s current investment portfolio is US$100mn in tourism, telecommunications, and financial markets. IFC was instrumental in establishing the country’s first leasing and housing-finance institutions. In 2006, IFC launched its advisory services program that continues to support development of tourism and financial sectors.