The Bangladesh Bank has issued Letters of Intent (LoI) to five companies to set up private credit reporting bureaus that will assess the creditworthiness of borrowers and build comprehensive credit histories for individuals and businesses.
The selected firms are Credit Info BD Credit Bureau, TransUnion Credit Bureau, bKash Credit Bureau, City Credit Bureau, and First National Credit Bureau.
These institutions will be tasked with creating detailed credit histories for individuals and businesses, enabling banks and lenders to assess borrowers鈥� creditworthiness more accurately and helping customers to access loans at fairer rates.
Out of 22 applications, the central bank shortlisted 13 firms before granting LoIs to the five organisations.
Each company has been given one year to establish the necessary infrastructure before applying for a final licence.
This development follows the central bank鈥檚 June 2024 guidelines, which for the first time allowed private entities to form credit bureaus in Bangladesh.
Under the framework, these bureaus will compile credit reports and generate credit scores by analysing borrowers鈥� past repayment behaviour, outstanding loan amounts, and other financial activities.
Until now, Bangladesh relied solely on the Credit Information Bureau (CIB) run by the central bank. While the CIB collects data on loans and repayment records, its coverage is limited and often does not provide a full picture of borrowers鈥� financial behaviour.
The new private credit bureaus are expected to go much further by drawing information not only from the CIB but also from other regulated financial institutions and, with consent, directly from individuals.
They may also use alternative data sources, making credit reporting more comprehensive and up to global standards. Bangladesh Bank has said that the initiative aligns with international best practices, where credit bureaus are widely used to enhance financial discipline and expand access to credit.
A positive credit history can lead to better loan terms and higher credit limits, while a negative credit history can make it difficult to secure loans or credit cards.
The guidelines call for a more rigorous credit risk assessment process beyond the existing credit registry, aligning with global trends.
A healthy financial system benefits from efficient risk and return assessments, aiding in long-term growth.
The credit bureau will adopt a mixed model, collecting and analysing information from the existing registry, other regulated financial institutions and additional available sources for comprehensive credit reporting and scoring, according to the guidelines.