Helping banks, financial institutions and non-bank finance companies (NBFCs) to better assess micro, small and medium enterprise (MSMEs) for credit solutions, Mswipe announced an industry first hybrid credit score in partnership with Equifax.

The score adds a quintessential layer of credible alternative data - transaction variables, merchants customer profile, loyalty base and other payment related parameters in addition to traditionally available demographic data and credit bureau rating.

The new tool will make assessment of MSME creditworthiness easier and provide the opportunity to differentiate risks thereby opening possibilities of dynamic pricing of credit solutions.

In addition to making it easier for MSMEs to avail credit with the new score, Mswipe is also providing retailers with the most affordable loan repayment facility through daily settlements on POS loans.

MSMEs, which comprise 95 per cent of businesses in India, typically face challenges in availing credit from traditional lenders. Lack of regular banking habits, financial and income statements of MSMEs limit banks and NBFCs in their credit testing ability to provide credit lines or loans as they continue to rely heavily on demographic data or bureau footprint for decision making process.

Amit Mande, Head – Lending Business, Mswipe said, “We have created an extremely powerful tool to differentiate risk and not only expedite decision making for banks and NBFCs but also offer risk based pricing for credit solutions. The credit score enhances Mswipe’s ability to allow our  lending partners to extend credit products like loans, credit lines, loans against POS to MSMEs in a quick and affordable manner.”

Equifax has strengthened the credit score by back testing  merchants’ credit behaviour in the past and identifying different risk variables, basis transaction history and merchant credit behaviour.

Nipa Modi, Country Head, Fintech, Insurance & WFS, Equifax said, “Over the years, Equifax, as the leading credit bureau in the country, has worked with the Indian financial services industry to help maintain highest levels of underwriting standards. Now, with its partnership with Mswipe, Equifax brings a unique blend of differentiated data and analytics thereby assisting MSME lenders and Fintechs navigate through crests and troughs of the lending cycle, further promoting responsible lending in these times. Equifax will facilitate lending of business loans to merchants backed by a statistical scoring mechanism using Mswipe POS data and merging it with the bureau performance data.”

The Mswipe credit score will be available for industry partners to offer credit solutions to MSMEs who have been hit badly owing to continued lockdowns amid the second wave of COVID-19.