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IFC Helps Tonga Increase Access to Finance through Credit Information Bureaus
IFC helped Tonga set up and launch its first credit bureau that allows banks to share credit information and better manage lending risks, lowering their credit defaults and expanding access to finance for individuals and small businesses. The Tongan branch, Data Bureau (Tonga) Ltd. was established in partnership with Data Bureau Ltd., a Fijian-owned credit information company.
Over the past year, the bureau has developed a database that has 3,000 public notices and the credit histories of more than 700 companies out of a total of 2,884 registered businesses in Tonga.
“The bureau is about ensuring that customer risk is properly managed through credit-information sharing,” said IFC’s Regional Manager for the Pacific Gavin Murray. “Based on other existing programs, individuals and small businesses will have greater access to credit at reduced lending rates, which will help them grow and expand their activities.”
IFC helped train staff members from Australia and New Zealand Banking Group Ltd., Westpac Bank, Tonga Development Bank, and MBf Bank in using the database. A code of conduct, a training guide, membership agreements, and customer flyers have been developed to assist with the roll out of the bureau.
“Our services not only benefit financiers and credit providers in the country, but also the people,” said Delores Elliot, manager of Data Bureau Ltd. “The bureau will greatly encourage people to be responsible in their financial commitments. It’s a win-win situation for both parties in the long term.”
IFC has been supporting Tonga’s financial sector to create a private credit bureau since 2010. IFC is also supporting South Pacific Business Development, a regional microfinance provider, in expanding access to finance to women entrepreneurs across Tonga. IFC’s advisory services are carried out in partnership with Australia, Japan, and New Zealand.