TransUnion CIBIL launched CIBIL MSME Rank (CMR) – a credit risk rank for MSMEs  in order to support banks and credit institutions to achieve robust credit growth in the Micro, Small and Medium Enterprises (MSME) sector while managing the non-performing assets (NPAs).

CMR uses machine learning algorithms to predict the probability of an MSME becoming NPA in the next 12 months. CMR provides a ranking to the MSME based on its credit history data on a scale of 1 to 10, CMR1 being the least risky MSME and CMR10 being the most risky MSME. The higher the CMR the higher the risk of NPA associated with the MSME.

Driving access to finance for MSMEs while controlling the quality of portfolios is the topmost priority for banks and credit institutions. Speaking at the launch in Mumbai, the Managing Director and CEO of TransUnion CIBIL- Satish Pillai said, “Financial inclusion and credit penetration are the keystones of propelling India on a sustainable high growth trajectory. Availability of credit to MSMEs is the lifeblood of our economy, but the sector is facing an ongoing challenge of rising NPAs. We believe resolving information asymmetry will be a contributor to making objective credit decisions while ensuring a wider and faster access to funds for MSMEs.”

Currently, the Indian MSME credit portfolio is estimated at INR 12 lakh crores. The NPA rate for MSMEs has increased continuously over last few years to reach 8.7 percent as of March 2016 and is expected to rise to 9.8 percent as of March 2017. As per the latest risk assessment, MSMEs falling in the highest risk bracket of CMR 7- 10 have a credit outstanding of INR 54,799 crores which is at risk of going into NPA.

TransUnion CIBIL is committed to support the credit industry with content, insights, products and solutions for driving business growth while catalyzing access to finance for deserving MSMEs. We are confident that the CIBIL MSME Rank will effectively help banks and credit institutions to make objective credit decisions, improve turnaround time & control NPAs and help MSMEs have access to faster and cheaper credit.

Source: SME Times