Credit information bureau TransUnion CIBIL has launched CIBIL MSME Rank (CMD), which is a credit risk rank for MSMEs in the country. CMR uses machine learning algorithms to predict the probability of a MSME becoming NPA in the next 12 months. It 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 riskiest MSME. Satish Pillai, MD and CEO of TransUnion CIBIL, said 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 Rs 12 lakh crore and the NPA rate for MSMEs has increased continuously over last few years to reach 8.7% as of March 2016, and is expected to rise to 9.8% 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 Rs 54,799 crore which is at risk of going into NPA. V.G. Kannan, chief executive, Indian Banks’ Association CMR is yet another initiative from TransUnion CIBIL to fortify the MSMEs to gain access to formal financial institutions with set parameters. Jairam Sridharan, group executive & CFO at Axis Bank said small business lending is an important focus area for Axis Bank and CMR can provide critical insights for managing risk and thereby enable greater credit opportunities for deserving small businesses.
