Small Industries Development Bank of India (SIDBI) is working with Indian Banks’ Association to get the member banks to provide borrower details so as to enable it to pull out alternate sources of data to come up with credit scores for MSME customers.

According to Sudatta Mandal, DMD, SIDBI, it will generate “fit” rank based on GST data, bank statements and income tax returns so as to get a proper credit score for MSME borrowers and enable them to avail a bank loan. SIDBI has collaborated with TransUnion Cibil and Online PSB Loans (OPL) for the same.

“Normally credit rating agency follow internationally accepted models for credit rating and it is usually seen to have some sort of bias towards smaller entities. This is also because most of these rating agencies rely on audited accounts which come in by November-December for most of these smaller entities. Hence the traditional sources of data are not readily available or reliable,” Mandal told newspersons on the sidelines of the 7th Eastern India Microfinance Summit organised by AMFI-WB here on Friday.

Financial inclusion

On the basis of consent given by customers, SIDBI would fetch GST data, bank statements and income tax returns and prepare a “fit” rank on the basis of an analytics tool prepared.

“We are working with IBA member banks for getting this ranking and this is likely to bring more new to bank customers into banking fold thereby increasing financial inclusion,” he said.

The microfinance industry, which has been witnessing a steady improvement in collection efficiency and disbursals, is likely to continue the growth momentum in 2023-24, industry insiders said.

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