Credit Information Bureau in Bangladesh: Strengthening Credit Risk Management Through Better Borrower Information
Lending is primarily a decision made with uncertainty. A bank must determine if a borrower has other loans to determine if the borrower already has high debt obligations, their record of loan repayment, and if there are early indicators that they may be having trouble with repayment. Borrowers, on the other hand, have much more information regarding their own financial situation than do lenders, a phenomenon that economists refer to as information asymmetry (World Bank, 2011). The mismatch is addressed by a Credit Information Bureau (CIB), which is a place where lenders can obtain credit information and lenders can access credit information to make decisions. It does not take the place of a bank’s judgment; it enhances the evidence on which the judgment is made. The article provides an explanation of what a CIB is, what it does, the importance of the CIB with respect to credit risk management, how the CIB works in Bangladesh, and its shortcomings.
A Credit Information Bureau (CIB), which is typically maintained by or under the management of a central bank, is a bureau that gathers, holds, and disseminates credit data on borrowers to participating lenders. Credit information generally encompasses the existing loans, outstanding loan balances, repayment history, default or non-performing loans, sanctioned credit limits, loan classification, and other factors that measure the degree of credit exposure (Bangladesh Bank, n.d.-a). A CIB is a compilation of data from a variety of institutions, providing a comprehensive view of a borrower’s overall debt, rather than just that of the bank with which they interact. Importantly, a CIB is not a decision-maker; rather, it provides credit information that lenders use to make informed lending decisions. The lender is responsible for interpreting the data and providing the credit (World Bank, 2011).
The credit-reporting process typically runs through the following stages: a borrower applies for a credit product from a bank or a non-bank financial institution (NBFI); the information regarding the borrower is recorded by the NBFI or bank; the NBFIs or banks share the borrower’s information with the CIB at regular intervals; the CIB stores all the information it receives from the banks and NBFIs; and any lender requests a credit report from the CIB before approving a loan application or existing borrower requests a credit report. The CIB plays a vital role in the country, as banks and financial institutions have to provide borrower-wise data periodically and get a CIB report for sanctioning almost all types of credit facilities (Bangladesh Bank, n.d.-b). The resulting report reveals to a lender the borrower’s current credit position and repayment history throughout the financial system, which the borrower cannot be trusted to provide on his or her own. But that’s just one input; lenders will add in an evaluation of income, cash flow, collateral, company performance, and risk level within a particular sector to determine a decision.
A functioning CIB supports credit risk management in several interconnected ways:
- Assessing creditworthiness. Past repayment behavior offers evidence, though not certainty, about future conduct.
- Identifying existing indebtedness. A borrower may hold facilities across multiple institutions that would otherwise stay invisible to any single lender.
- Reducing information asymmetry. Lenders gain data that goes beyond what a borrower discloses voluntarily.
- Detecting potential over-borrowing. Multiple simultaneous facilities can signal elevated exposure and repayment strain.
- Supporting portfolio-level risk monitoring. Institutions can track sector- and borrower-level risk concentrations across their loan books.
- Reducing default-related losses. Better-informed decisions at origination can lower the incidence of downstream defaults.
These functions together make the World Bank (2011) describe credit reporting infrastructure as an important element of financial-sector stability, rather than a simple tool for individual lenders.
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On 18 August 1992, Bangladesh Bank’s Credit Information Bureau was created with the clear mandate of reducing default loans and has since been a part of the central banking system of Bangladesh (Bangladesh Bank, n.d.-a). The system was online since 2011, and in October 2015, a more sophisticated online-based system was launched based on Bangladesh Bank’s in-house resources, which further enhanced the speed and reliability of the report generation process (Bangladesh Bank, n.d.-a). The reporting threshold was lowered to comply with international data coverage standards. All the banks and non-bank financial institutions (NBFI) regulated by Bangladesh Bank are required to report monthly data on borrowers’ outstanding balances, even for relatively small exposures (Bangladesh Bank, n.d.-a). A classified loan can be marked with or without the name of the institution holding the loan, as Bangladesh Bank Order 1972 (as amended) also obligates institutions to submit this information and limits the disclosure of information to only a classified loan. In the actual practice, banks are required to get a CIB report prior to approval of retail loans, SME facilities, corporate credit, and consumer credit, while the outcome of the classification status of the loan is directly linked with the banks’ evaluation of the loan applications for default risk (Bangladesh Bank, n.d.-b).
Small and medium enterprises (SMEs) frequently have limited or weak financial records, and lenders are less apt to be willing to lend based on repayment ability than on other factors such as collateral. CIB information fills in part of this gap by providing lenders with a documented track record of an SME’s credit exposure and repayment history with other banks, not just the one where the application is being made. With sustained repayment history, enterprises can develop a credit history that helps them get more credit based on their history with fewer collateral demands. This is directly linked with financial inclusion — the more complete the credit reporting, the more “invisible” borrowers will have a history that can broaden access to formal credit (MicroSave Consulting, 2025).
While a CIB is a valuable input, it is not a complete solution, and there are several limitations to be noted. The accuracy and completeness of the data rely on the quality of data reported by reporting institutions, and the accuracy of the data provided by a reporting institution can cause data to be distorted. Even when the CIB is not the only way to assess borrowers, governments in Bangladesh continue to face challenges in evaluating borrowers with little or no formal credit history, especially because most of the microfinance, cooperative lending, and much of the informal and digital-credit industry have not been covered by the CIB. While the CIB is not the only way to assess borrowers, the lack of adequate assessment of borrowers with little or no formal credit history has remained a challenge in Bangladesh, particularly as most of the microfinance, cooperative lending, and much of the informal and digital-credit industry have not been covered by the CIB. (MicroSave Consulting, 2025) There are also privacy and data security issues to consider, as credit information is sensitive enough, and its use must be protected.
Perhaps most importantly, a clean CIB will tell a history, not a forecast: It is possible to have a history of no defaults and still run into financial trouble to come. That’s why it is important to consider credit information as one factor in making a lending decision and not the whole credit assessment.
Credit reporting will continue to change as digital lending and data infrastructure do so. Traditional credit information is not the only data that can be considered credit information, with the inclusion of automated credit assessment, alternative data (e.g., utility, telecom, and merchant transaction records), and AI/machine learning-based credit assessment models (MicroSave Consulting, 2025). The development of a multi-bureau environment is underway in Bangladesh, with Bangladesh Bank also issuing letters of intent to multiple private credit bureaus as part of an effort to fill in the gaps with their existing CIB and access a broader data source (MicroSave Consulting, 2025). This could improve credit assessment by allowing for the real-time reporting of data, open banking approaches to data sharing, and better quality data, but this would have to be balanced with enhanced consumer data protection, cybersecurity protections, and rules around consent and data governance.
A problem that has long existed in lending and that a credit information bureau attempts to solve is the lack of information available to lenders that they can verify with the borrower’s knowledge. A CIB would minimize information asymmetry by enabling lenders to know the repayment history of borrowers and their exposure from other lenders and to make informed and responsible lending decisions. Since 1992, the CIB role has been played by Bangladesh Bank’s CIB in Bangladesh, and it has been growing since then in parallel with the growth of the financial infrastructure of the country. Despite this, CIB information needs to be used as part of a comprehensive credit assessment process, which also involves income, cash flow, collateral, and business fundamentals. As the digital finance sector grows, credit reporting will increasingly rely on real-time and alternative data, resulting in more powerful data but also increased pressure on data quality, privacy, and governance.
References
Bangladesh Bank. (n.d.-a). Credit Information Bureau. Retrieved September 18, 2026, from https://www.bb.org.bd/en/index.php/about/deptdtl/11
Bangladesh Bank. (n.d.-b). Credit Information Bureau: Login [Bureau overview and functions]. Retrieved September 18, 2026, from https://cis.bb.org.bd/
Bangladesh Bank. (2015). Policies and guidelines for new CIB online solution [PDF]. Retrieved September 18, 2026, from
https://www.bb.org.bd/aboutus/regulationguideline/cib/draft_cib_policy2015.pdf
MicroSave Consulting. (2025, December 8). Bangladesh’s bureau reform turns repayment history into portable assets. https://www.microsave.net/2025/12/08/bangladeshs-bureau-reform-turns-repayment-history-into-portable-assets/
World Bank. (2011). General principles for credit reporting. World Bank. https://www.worldbank.org/en/topic/financialsector/publication/general-principles-for-credit-reporting
