Banks and non-banking finance companies (NBFCs) are recalibrating their underwriting models as early signs of stress emerge in the micro, small and medium enterprise (MSME) segment. Rising delinquencies, particularly in smaller ticket-size loans, are prompting lenders to adopt more nuanced credit assessment frameworks.

“We’re expanding our distribution and leveraging data analytics to improve credit assessment and risk management,” Manish Kothari, group president & head – commercial banking at Kotak Mahindra Bank , said. Kotak expects rural India to be an important banking opportunity over the next five-seven years.

Leveraging alternative data for holistic credit assessment

Lenders are integrating alternative data such as GST filings, cash-flow patterns, verified business transact

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