Mswipe develops hybrid score to assess MSMEs for risk-based credit

Mobile PoS (Point of Sale) machines and mobile payments solution provider Mswipe today announced a hybrid credit score in partnership with Equifax — a score that it claims will help banks, financial institutions, and non-bank finance companies (NBFCs) better assess micro, small and medium enterprise (MSMEs) for credit solutions.

In a statement, Mswipe said its new credit score adds a layer of credible alternative data such as 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," Mswipe said in its statement, adding that it is also providing retailers with affordable loan repayment facilities through daily settlements on POS loans.

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Amit Mande, Head, Lending Business, Mswipe said:

“We have created a 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.”

According to the statement, 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.

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.

Mswipe is the market leader in the SME segment and offers payments across all modes, processing close to $5 billion in payments annually with 1.4 million points of acceptance across the country, and serving merchants in over 1,000 cities and towns, as of January 2021.