remain a substantially underserved segment. Only about 16 percent of these businesses get formal credit from traditional financial institutions, with an IFC-Intellecap report estimating a humongous addressable credit gap of approximately Rs 28.3 trillion.
Having an industry-specific approach is also one of the approaches that is extending credit coverage for MSMEs. An access to ecosystem-based data points enables these lenders to assess businesses with a deeper purview, keeping industry-specific indicators in consideration. Moreover, these lenders have innovated on and come up with proprietary underwriting algorithms to accurately assess the creditworthiness of a business. To supplement that, the India stack infrastructure enables frictionless customer journeys and efficient underwriting.
Therefore, these digital players are continually innovating and introducing alternate data-led credit-scoring as well as lending models to disburse loans in the MSME segment.