Mumbai: Helping banks, financial institutions and non-bank finance companies (NBFCs) to better assess micro, small and medium enterprise (MSMEs) for credit solutions, Mswipe announced an industry first hybrid credit score in partnership with Equifax.
The score adds a quintessential layer of credible alternative data – transaction variables, merchants customer profile, loyalty base and other payment related parameters in addition to traditionally available demographic data and credit bureau rating.
The new tool will make assessment of MSME creditworthiness easier and provide the opportunity to differentiate risks thereby opening possibilities of dynamic pricing of credit solutions.
In addition to making it easier for MSMEs to avail credit with the new score, Mswipe is also providing retailers with the most affordable loan repayment facility through daily settlements on POS loans.
MSMEs, which comprise 95 per cent of businesses in India, typically face challenges in availing credit from traditional lenders. Lack of regular banking habits, financial and income statements of MSMEs limit banks and NBFCs in their credit testing ability to provide credit lines or loans as they continue to rely heavily on demographic data or bureau footprint for decision making process.
Equifax has strengthened the credit score by back testing merchants’ credit behaviour in the past and identifying different risk variables, basis transaction history and merchant credit behaviour.
The Mswipe credit score will be available for industry partners to offer credit solutions to MSMEs who have been hit badly owing to continued lockdowns amid the second wave of COVID-19.