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TransUnion CIBIL partners with MoSPI to launch MSME Credit Health Index 

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TransUnion-CIBIL,-MoSPI-launch-MSME-Credit-Health-IndexCredit Information Company TransUnion CIBIL has partnered with the Ministry of Statistics and Programme Implementation (MoSPI) to launch the First Edition of the Quarterly MSME Credit Health Index. The index will provide a reliable measure and benchmark of the growth and strength of MSME (Micro, Small & Medium Enterprises) in India.

Objective of the Index:

i.To provide Government, Policy makers, lenders and other stakeholders, insights and analysis on various aspects of the health of MSME industry to enable better policy with respect to MSME lending.

ii.The comprehensive information will facilitate better risk management and inclusion of MSME in Indian Banking and financial system.

Parameters:

i.The index is built using credit data submitted by Credit Lending Institutions (CLIs) to TransUnion CIBIL.

ii.The index measures credit health of India’s MSME industry based on two parameters -Growth & Strength.

  • Growth Index – Growth Index is measured by increase in exposure value over time.It indicates improvement in credit growth
  • Strength Index -Strength Index is measured by decreasing risk in terms of Non-Performing Assets (NPA).It implies better asset quality, denoting improvement in structural strength of the sector.

Highlights from 1st Edition Report:

i.The 1st Edition is based on data from March 2018 – June 2020.

ii.Growth Index shows low growth in June 2020 due to the Pandemic.

iii.MSME sector is facing an increased level of NPAs (Non-Performing Assets) in the last two years due to slower rate of economic growth.

State-wise Index:

The index also measured MSME portfolio at the state level, Tamil Nadu, Uttar Pradesh and Rajasthan have shown higher growth momentum.  Tamil Nadu reflects better Strength also.

Lender Category Index:

i.NBFCs and Private Banks showed higher growth momentum.

ii.Private Banks contributed to around 50% of incremental credit to MSME sector over the last two years (20120)

iii.Public Sector Banks have seen muted credit growth in the last two years (2018-20).

Recent Related news:

i.On September 24, 2020 Government constituted Five Ministerial Task Forces to make India’s Micro, Small, and Medium Enterprises better equipped for future and formulating strategies to make India a leading exporter.

About TransUnion CIBIL:
Managing Director, Chief Executive Officer – Rajesh Kumar
Headquarters – Mumbai, Maharashtra

About Ministry of Statistics and Programme Implementation (MoSPI):
Minister of State (MoS), Independent Charge – Rao Inderjit Singh