BIIA welcomes the Indian Government’s decision to raise the foreign direct investment limit from 49% to 74% for credit bureaus. Provided that other investors dilute their shares, foreign investors such as Experian, Equifax and TransUnion will be able to consolidate revenues and earnings.
BIIA has argued for some time that the threshold of 49% was unfair and did not provide a level playing field for the consumer credit information sector. Indian outsourcing companies process data on individuals and businesses of foreign clients in India without any restrictions, while foreign information companies were not permitted to process information of Indian individuals in India.
This latest move by the Indian Government will provide a much welcomed boost in direct investment in the consumer credit information sector, thus accelerating the development of credit information services and provides much needed financial inclusion for individuals and small businesses.
Credit Bureaus in India have also hailed the Government’s decision:
Arun Thukral, Managing Director of CIBIL, told Business Line that the increase in FDI in credit information space is a progressive move that will catalyse growth of the credit information industry in the country and will refuel technological advancements and global expertise for the existing players.
Mohan Jayaraman, Managing Director, Experian Credit Information Company of India, welcomed the decision. “Given the long term nature of this industry, it makes sense to encourage strategic investors,” Jayaraman stated.
Equifax Credit Information Services (ECIS) has also welcomed the Government move to hike foreign direct investment (FDI) cap in the credit information sector to 74 percent from existing 49 percent. “Going forward, the increased FDI cap will provide ECIS with additional flexibility in developing leading analytical solutions, differentiated products and value-added services and we look forward to continuing our close working relationship”, stated Sanjay Patel, Managing Director and CEO, Equifax.