As India moves towards becoming a USD 7 trillion economy by 2030, it is essential to ensure an unhindered flow of credit to the Micro Small and Medium Enterprises (MSME) sector and to further this lending objective, TransUnion CIBIL hosted one of its multi-city ‘MSME Conclave, enabling Credit for Developing Bharat’, in Chennai, recently.

The TransUnion CIBIL MSME Conclave underlines the importance of the MSME sector which contributes significantly to the country’s GDP growth by generating employment, promoting regional development, bridging the income gap and encouraging innovation and entrepreneurship.

Its objective is to empower MSME lenders across the country with insights and a deeper understanding of information and analytics solutions for driving access to finance for MSMEs while ensuring sustainable MSME credit portfolio growth. Senior officials from banks and credit institutions in the region attended the conclave.

Private sector banks continue to be the biggest lender segment for MSMEs in Tamil Nadu, holding a 51% share of total lending in the quarter ending June 2024. The majority of loans disbursed were to the Manufacturing Sector at 37%, with Gold Loans accounting for 29% of total MSME loans disbursed in the state. Indicating strong asset quality, the share of loans to the low-risk segment i.e., CIBIL MSME Rank (CMR) 1-3 was highest at 49%.

The top cities in Tamil Nadu with the highest MSME loan disbursement are Chennai, Tiruppur, Coimbatore and Madurai. The state-wide trend of private sector banks garnering the highest share in lending to MSMEs was reflected in all the four cities: Chennai at 41%, Tiruppur at 62%, Coimbatore at 69% and Madurai at 57%.

The CIBIL MSME Rank and Commercial Credit Report play an important role in easing flow of credit to the MSME sector. They assist credit institutions in formulating risk policies, enabling quick and easy sanction and disbursement of loans and ensuring judicious portfolio management.

The Commercial Credit Report includes detailed information on an MSME’s credit history, including the nature and amount of credit facilities availed, repayment patterns, and current obligations. It also reflects any defaults or delays in payments.

This report provides credit institutions with a clear picture of the company’s credit behaviour, helping them assess the credit risk.