Even the CEO and Managing Director of TransUnion CIBIL -Mr. Satish Pillai- has spoken on this move by the bank. According to Pillai, by offering risk-based pricing for their MSME loans, Bank of Baroda has taken a very progressive approach. He and his team at CIBIL remain confident that this strategy is not only helpful when it comes to asset quality of portfolios managed, but also when it comes to managing risks associated with disbursing loans. Finally, he is certain that Bank of Baroda’s long term goal, with the help of this strategy, has been to improve credit penetration for those MSMEs in the country that remain more deserving.
Over time, this strategy could lead to the development of strong businesses and fuel the growth of MSMEs throughout the country. CMR based pricing in general aids in resolving can't information asymmetry, according to Pillai. Hence, it contributes towards allowing for more objective credit based decisions. This ensures both a faster and wider disbursal of funds towards MSMEs without the worry of risk that comes associated with loan repayment.
In conclusion, MSME loans can take your business to the next level. Luckily, filling out an application for a business loan has never been simpler with Finserv MARKETS. As per your convenience, you can gradually complete your entire application online from the comfort of your home. You get access to funding of upto ₹30 Lakhs and get it approved in a record time of under 3 minutes. Additionally, the Bajaj Finserv Business loan available on Finserv MARKETS offers flexible repayment tenures ranging between 12–60 months. Fund your next business idea with Bajaj Finserv Business Loan, available on Finserv MARKETS.
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