Page 46 - Banking Finance July 2020

ARTICLE

Present CMR distribution of MSME Portfolio scorecard for MSMEs to predict default in next 12
months.CMRs are compliant with
Basel norms and will help in
overcoming some of the key
challenges in MSME lending like
delayed submission/Quality of
financial statements ,subjectivity of
credit decisions etc.

2. Generation of CIBIL report is an
integral part of due diligence process
and CMR will be an additional
parameter in that report itself,
However generation of that report
ranks needs to be opted while
generating the CIBIL Commercial
credit report. Every CMR grade has
a validated pdestimate associated
If We will see the data of MSME In Non-Npa Portfolio 39% with it which can help bank to offer risk based pricing to
companies lies in CMR 1, 2 & 3 category where the scope MSME units.
of finance in already available while in CMR 4 & 5 percentage 3. CMRs can facilitate continuous and timely surveillance
is 33% & others are in CMR 6, 7, 8 & 9 category.
of MSMEs which is otherwise difficult for lenders
We may see there is a huge opportunity not only for lending 4. Renewal of existing accounts, these CMRs can act as a
monitoring tool to judge their financial performance.
but also customer can be guided to improve their rating by
maintaining Financial discipline as well as to they must
''CIBIL MSME Rank will be very helpful tool for credit decision
aware about the technical reasons for lower ratings .It will
as collection of information is very difficult for MSME sector
help Banks as well as customer to minimise the risk and get
which is largely unorganised. This will help Banks in
better pricing. There are already 69% MSME borrower they
acquisition of new MSME customers as well as to reduce
can have easy access to credit.
turnaround time in disposal of proposal. It will also provide
greater credit opportunities for deserving small businesses
With the help of CMR Rating it is a game changer in doing
the due diligence as it was very difficult to do this because finally CIBIL MSME rank will help lenders to take quality
credit decisions, improve Turnaround time, Control NPA and
it is largely very unorganised sector.
provide access to faster and cheaper credit. ''
Source: report-msme-pulse-June-2018
Disclaimer:
Benefits of CIBIL CMR Information from various publics sources have been utilized

1. The new product is statistically built behavioural for writing this article. T

Review of Rs. 1 lakh croreAgri Infra Fund likely after disbursing Rs. 20,000 cr

The government plans to review its newly launched Rs 1 lakh croreAgri Infrastructure Fund (AIF) after the disbursement
of Rs 20,000 crore. "The scheme, operational for 10 years, will be reviewed by the Department of Expenditure for
evaluation and mid-course correction if required," said a senior agriculture department official, who did not wish to be
identified. "It will be monitored regularly through an online platform. All assets created under this scheme will be
geotagged for effective realtime monitoring." Under this scheme, disbursement is scheduled in four years, starting
with sanction of Rs 10,000 crore in the first year and Rs 30,000 crore each in the next three financial years.

46 | 2020 | JULY | BANKING FINANCE