{"id":6075,"date":"2017-06-09T04:42:00","date_gmt":"2017-06-09T04:42:00","guid":{"rendered":"\/blog\/?p=6075"},"modified":"2025-01-29T11:55:28","modified_gmt":"2025-01-29T06:25:28","slug":"everything-you-should-know-about-cibil-msme-rank","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/blog\/loan-for-business\/everything-you-should-know-about-cibil-msme-rank\/","title":{"rendered":"Everything You Should Know About CIBIL MSME Rank"},"content":{"rendered":"\n

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To access the credit risk of micro, small, and medium enterprises (MSMEs), TransUnion CIBIL has recently launched a ranking for these firms. TransUnion CIBIL, India\u2019s leading credit information company, has one of the largest databases on commercial entities, with over 2400 members; comprising banks, financial institutions, non \u2013 banking financial companies, and housing finance companies. This credit risk ranking will help the banks and other lending institutions to evaluate their credit decisions better. The ranking will also enable the financial institutions to understand the historical credit behavior of their borrowers of SME loans\/MSME loans\/business loans<\/a>, while predicting their behavior in the near future. The product will also aid in profiling the borrowers better and strategizing their goal performance. This ranking also helped in aggregating exposure between INR 10 Lakhs to INR 10 crores. Credit ranking, using machine algorithm will have the ability to predict the probability of a micro, small or medium enterprise becoming a non – profit asset (NPA) by next year.<\/p>\n\n\n\n

At present, there is an outstanding of INR 54,799 crore which is at a risk of becoming bad MSME loans. The MSME ranking will be given on a scale of 1 to ten based on the credit history of the last seven years. The higher the ranking, the higher will be the credit risk for them. \u201cWe find that Rs 54,799 crore of exposures to MSME is sitting in what we define as the highest risk category and may slip into MSME,” Cibil chief operating officer Harshala Chandorkar said to ET. <\/p>\n\n\n\n

Speaking at the launch, Mr.Satish Pillai, MD, and CEO of TransUnion CIBIL said: \u201cThe sector is facing an ongoing challenge of rising NPAs (non-performing assets). We believe resolving information asymmetry will be a contributor to making objective credit decisions while ensuring wider and faster access to funds for MSMEs.\u201d It should be noted that credit to the sector moved up to 11 percent last year. At present, the total credit portfolio for micro, small and medium enterprises is estimated to be INR 12 trillion which is a huge amount.<\/p>\n\n\n\n

Currently, the CMR will be available only to the member banks, and slowly it may be open to the borrowers as well. It will be similar to the credit score, being open to the retailers. According to Chandorkar, the company is also looking forward to launching a similar credit ranking scale for mid- corporates and large corporates as well. <\/p>\n\n\n\n

Per CIBIL Transunion website, CIBIL MSME RANK is applicable across the loan lifecycle.<\/p>\n\n\n\n