- G20 INSIGHTS
Expanding Data Collection to Streamline MSME (Micro, Small and Medium Enterprise) Lending
Micro, Small and Medium Enterprises (MSMEs) are an integral cog of the growth engine of different global economies. In India in 2018, MSMEs employed 40% of the workforce, contributed 37% of GDP and 43% of exports.  In spite of exclusive legislation and policies, lack of access to formal credit has hampered MSMEs from realizing their full potential. For lenders, the fragmented and opaque nature of available MSME information poses serious challenges in underwriting.
This policy brief proposes a policy framework for establishing data banks intended to further facilitate the use of alternative data in the MSME lending landscape.
MSMEs are the backbone of every economy and contribute heavily towards employment in a nation. According to the World Bank, MSMEs play a major role in most economies, particularly in developing countries.