SBI MD bats for alternative data to assess MSME creditworthiness

Banks want to lend money to small businesses, but it is hard for them to know if those businesses can pay the money back.

Right now, banks mostly look at one kind of record to understand a business.

However, many small businesses are not in that record system.

In India, only 1 out of every 9 businesses has such a record.

A top banker from State Bank of India talked about a new way to solve this problem.

He said banks could look at other clues, like how much electricity a business uses or how often people use their mobile phones.

Those clues can show whether a business is active and doing well.

He suggested that all this information should be collected in one safe place called a credit bureau.

He also said computers could one day help banks make these decisions automatically.

That idea is still very new because there is not enough old data to teach the computers yet.