Point of sale (POS) terminals provider Mswipe on Wednesday announced a credit scoring system for lenders including banks, financial institutions, and non-bank finance companies (NBFCs) to better assess micro, small and medium enterprises (MSMEs) for extending credit. The scoring done is based on alternative data including transaction variables, merchants’ customer profile, loyalty base, and other payment-related parameters along with traditionally available demographic data and credit bureau rating. The scoring tool intends to make assessments of MSMEs’ creditworthiness easier “and provide the opportunity to differentiate risks thereby opening possibilities of dynamic pricing of credit solutions,” the company said.
Mswipe would also offer retailers an affordable loan repayment facility through daily settlements on POS loans. MSMEs, which comprise 95 per cent of businesses in India, usually face challenges in securing credit from banks and other traditional lenders due to the lack of regular banking habits, financial and income statements of MSMEs. “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,” said Amit Mande, Head–Lending Business, Mswipe. The scoring tool was announced in partnership with consumer credit reporting agency Equifax.
The Mswipe credit score will be available for industry partners to offer credit solutions to MSMEs who have been impacted due to Covid induced lockdowns amid the second wave of the pandemic. “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,” said Nipa Modi, Country Head, Fintech, Insurance & WFS, Equifax.
Mswipe claimed to be the largest independent mobile POS merchant acquirer and network provider with 6.75 lakh POS and 1.1 million QR merchants in India. The company provides payment acceptance services for MSMEs to accept payments via cards, wallets, mobile payment apps and bank apps, contactless and QR payments. Launched in 2011. Mswipe’s investors include B Capital, UC-RNT, Falcon Edge Capital, Matrix Capital Partners, DSG Partners, and Epiq Capital.