Introduction FIT Rank:
FIT Rank stands for financial, Income & Trade Rank. It is a unique rank that leverages the power of Goods and services tax (GST), Bank statements and income tax returns (ITR) information to provide a ranking model for MSME lending. FIT Rank combined with CIBIL MSME Rank (CMR) provides a more detailed view of the MSME's credit profile by combining the credit (loan) behavioral aspects with financial, trade, and income characteristics. The lenders can use the risk differentiation capability of FIT Rank to reduce NPA.
Challenges:
- Semi-structured data requiring increased complexity to transform and standardize
- Bank statements received in PDF format that requires additional effort to parse and standardize the information for consumption
- Historical data selection required greater due diligence to train, test and validate the Machine Learning based model.
Solution:
- Comprehensive underwriting using Credit Data, Bank Statements, Income Tax Returns, and GST Data
- Statistical and Modular approach that works with available information for credit assessment
- Ability to assess New-To-Credit using Bank Statement, ITR, and GST Information
- Additional Risk Differentiation over and above CIBIL MSME Rank - Machine Learning Algorithm to predict the Probability of an MSME becoming A Non-Performing Asset (NPA) In the Next 12 Months
- Take Underwriting Decision A Notch Higher by Leveraging – (1) Bureau Data (2) Bank A/C Details (3) ITR Data (4) GST Data
Benefits:
- Scoring the Un-scored: The New to Credit (NTC) base, which was earlier unranked on the CIBIL MSME Rank (CMR) due to lack of credit footprint, will now be assessed based on either or all the following alternative data: bank statements, IT returns, GST returns.
- Sharper Risk Differentiation: Assessment using credit and alternative data
- Enhanced Risk Differentiation Capability: Combined with CIBIL MSME Rank (CMR), FIT Rank sharpens the risk differentiation capability.
- Drive MSME growth: Assessing more MSME profiles can drive incremental credit growth for India’s MSME sector, thanks to a reliable, digitized, no-bias risk assessment system.
- Default prediction: Can segregate good-performing and non-performing borrowers.
- Adopting digital lending processes: Improving efficiency of loan processing and reducing time taken for decisions and disbursal.
Salient Features of our product:
- FIT Rank for Acquisition: Pre-screen and provide financial assistance to many more MSME profiles, thus driving incremental credit and revenue growth for lenders.
- FIT Rank for Risk Appraisal: Information from multiple sources provides an objective and improved risk differentiation enabling sharpened credit underwriting for MSME loans.
- 360-degree MSME view with FIT Rank & CMR: FIT Rank combined with CIBIL MSME Rank (CMR) provides a more detailed view on the MSMEs credit profile by combining the credit (loan) behavioral aspects with financial, trade and income characteristics.