MSME Credit Health Index:
The latest MSME Credit Health Index indicates that MSME credit growth has accelerated in the quarter ending September 2020 as compared to the quarter ending in June 2020.
- The Emergency Credit Line Guarantee Scheme (ECGLS) has helped in the credit growth for the Micro, Small and Medium Enterprises (MSME) sector.
About the MSME Credit Health Index:
- Launch: The TransUnion CIBIL in partnership with the Ministry of Statistics & Programme Implementation (MoSPI) has launched the MSME Credit Health Index.
- The Index is published quarterly.
- Aim: To provide a measure of the growth and strength of the MSME sector in India.
- The Index will provide government, policymakers, lenders, and MSME market participants, a numeric indicator for benchmarking the health of the MSME sector.
- Measurement: The Index measures the credit health of India’s MSME industry on two parameters i.e, growth and strength.
- Both the growth and strength indices follow the principle of higher the better.
- Growth is measured by plotting an increase in exposure value (outstanding balances) over time.
- An increasing Growth Index indicates an improvement in credit growth.
- Strength is measured by a decrease/increase in credit risk in terms of non-performing assets (NPA).
- An increasing Strength Index implies better asset quality and therefore denotes an improvement in the structural strength of the sector.
- This measurement model will facilitate better MSME credit risk management, formulation of strategies and policies to support the revival and resurgence of the MSME sector and the economy.
- The overall growth index inched up to 114 points, which is a three-point increase from 111 in June 2020.
- The overall Strength Index also improved to 89 from 83 over the same period.