Mumbai, November 2: In order to boost the MSME sector in the country, TransUnion CIBIL in partnership with the Ministry of Statistics & Programme Implementation (MoSPI) has launched the MSME Credit Health Index.
This becomes very important as the MSME Credit Health Index will provide government, policymakers, lenders and MSME market participants, a unique and reliable numeric indicator to measure the health of the sector.
Here are details about the MSME Credit Health Index:
The MSME Credit Health Index is built using credit data submitted by lending institutions to TransUnion CIBIL. The index measures the credit health of India’s MSME industry on two parameters: Growth and Strength.
Growth will be measured by plotting increase in exposure value (outstanding balances) over time and strength is measured by a decrease/ increase in credit risk in terms of non-performing assets (NPA).
The first version of the MSME Credit Health Index is based on data from March 2018 to June 2020. Rajesh Kumar, MD and CEO, TransUnion CIBIL, in a statement mentioned.
According to reports, the MSME sector has seen an increased level of NPAs in the last two years due to a slower rate of economic growth. The cash flows of MSMEs have been impacted over a period of time thereby limiting their ability to service debts. This has resulted in the Strength Index reflecting a decreasing trend.
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