Jaipur, 18th September 2024: As India moves towards becoming a USD 7 trillion economy by 2030, it is essential to ensure an unhindered flow of credit to the Micro Small and Medium Enterprises (MSME) sector. To further this lending objective, TransUnion CIBIL launched its ‘MSME Conclave: Enabling Credit for Developing Bharat’, with the first one hosted in Jaipur today.
The TransUnion CIBIL MSME Conclave underlines the importance of the MSME sector which contributes significantly to the country’s GDP growth by generating employment, promoting regional development, bridging the income gap and encouraging innovation and entrepreneurship. Its objective is to empower MSME lenders across the country with insights and deeper understanding of information and analytics solutions for driving access to finance for MSMEs while ensuring sustainable MSME credit portfolio growth.
The keynote address at this conference was delivered by Mr. Vivek Tripathi, Head Commercial Banking from AU Small Finance Bank. Senior officials from banks and credit institutions in the region attended the conclave.
Private sector banks lead MSME lending in Rajasthan
Private sector banks continue to be the biggest lender segment for MSMEs in Rajasthan, holding a 40% share of total lending in the quarter ending June 2024. The majority of loans disbursed were to the Manufacturing Sector at 27%, with Unsecured Loans accounting for 21% of total MSME loans disbursed in the state. Indicating strong asset quality, the share of loans to the low-risk segment i.e., CIBIL MSME Rank (CMR) 1-3 was highest at 55%.
The top cities in Rajasthan with the highest MSME loan disbursement are Jaipur, Jodhpur, Kota, Udaipur, and Bikaner. The state-wide trend of Private sector banks garnering the highest share in lending to MSMEs was reflected in three of these cities: Jaipur at 43%, Udaipur at 42% and Jodhpur at 34%. However, Public sector banks had a higher share of MSME loans in Kota – 45% and Bikaner – 38%.
CIBIL MSME Rank and Commercial Credit Report
The CIBIL MSME Rank and Commercial Credit Report play an important role in easing flow of credit to the MSME sector. They assist credit institutions in formulating risk policies, enabling quick and easy sanction and disbursement of loans and ensuring judicious portfolio management.
The Commercial Credit Report includes detailed information on an MSME’s credit history, including the nature and amount of credit facilities availed, repayment patterns, and current obligations. It also reflects any defaults or delays in payments. This report provides credit institutions with a clear picture of the company’s credit behaviour, helping them assess the credit risk.
The CIBIL MSME Rank ranges from 10 to 1, with 1 being the best rank possible. It provides a single number summary of the Credit Information Report of MSMEs, encapsulating the credit history and loan repayment behaviour of the business. This rank is only available for companies with a current credit exposure of up to Rs 50 crore.
Continuing with the commitment of supporting credit institutions in MSME lending for enabling credit to Bharat, TransUnion CIBIL will be hosting the series of this MSME conclave across India.
