Empowering the Underbanked through the Innovative Pre-Credit Score Initiative
In a world striving for new innovations in pursuing holistic financial inclusion, Samhita-CGF takes a bold step forward with its innovative network alliance to bridge the credit gap faced by underbanked communities and micro-entrepreneurs. In partnership with SIDBI, CGTMSE, and NSDC, Samhita-CGF is introducing the Pre-Credit Score (PCS), an innovative credit scoring framework that empowers first-time borrowers. Unlike traditional scoring models, which rely on past credit history, the PCS delves into income and expense patterns, as well as lifestyle indicators, providing a comprehensive view of creditworthiness. This revolutionary approach opens doors for New To Credit (NTC) and New To Business (NTB) segments, offering them access to formal credit.
The challenge: Access to commercial capital
As per SIDBI, only 2.5 Cr. or less than 40% of the MSME have ever been provided formal credit, which means over 60% of this sector has no access to formal credit. This glaring credit gap persists, particularly in the informal sector, where businesses are often funded by non-transparent, high-interest informal sources. Further, there is a glaring gender disparity in credit usage. Women in India receive credit equivalent to only 27% of the deposits they contribute, while men receive credit equal to 52% of their deposits.
