Now Reading: SBI pushes alternative data for MSME credit assessment
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SBI pushes alternative data for MSME credit assessment
State Bank of India's managing director Ashwini Kumar Tewari has pitched for using alternative data such as power consumption and telecom records to assess MSME creditworthiness, citing that only 1 crore of…
The Story in Brief
State Bank of India's managing director Ashwini Kumar Tewari has pitched for using alternative data such as power consumption and telecom records to assess MSME creditworthiness, citing that only 1 crore of 9 crore MSMEs are GST-registered. Speaking at the Fibac event, Tewari said lenders struggle to evaluate the large segment of unregistered businesses using only GST and banking data. He suggested routing alternative customer data through credit bureaus to build comprehensive borrower profiles, but noted that integrating multiple platforms is costly and automated models remain at an early stage due to insufficient historical data.
The Indian Opinion
The push for alternative data sources is sensible but risks becoming another talking point if credit bureaus and banks don't invest in standardised, affordable integration. Claims that GST data alone fails ignore that automated models based on power or telecom records are still early-stage and lack historical data for validation. The real test: can these alternative data streams be routed through credit bureaus without prohibitive costs for small lenders, or will only big banks like SBI benefit?
Source: rediff.com
This story was synthesised by AI from the source linked above.
