Just like a good CIBIL Score is necessary for individuals to avail of credit and lending services at lower and attractive interest rates, the same way CIBIL MSME Rank (CMR) is equally important for lenders for better and risk-free lending prospects. Transunion CIBIL Limited formerly known as Credit Information Bureau (India) Limited is a credit information company or credit bureau that generates CIBIL/Credit scores of borrowers availing financial products on the basis of financial or banking documents provided by their respective banks to TransUnion CIBIL.
What is the CIBIL score?
CIBIL score is a three-digit numeric between 300-900 in which Credit Scores as close to 900 is considered good by lending institutions like Banks and NBFCs. As per TransUnion CIBIL, a score of 750 or above is considered good. As per any Credit Reports Consultant, the Credit Scores depict your repayment history, creditworthiness along with your repayment capability.
What is CMR?
CIBIL MSME Rank (CMR) is a credit-default predictor facility for MSME that provides insight into the credit behavior of the borrowing entities (MSMEs). CMR generates a rank of MSME based on its credit history data on a scale of 1 to 10. In this case, a lower sale is beneficial for MSMEs like CMR 1, rather than the least and riskiest rank that is CMR 10. The lower the rank, the lower is the risk of NPA related to the MSME.
There are several MSMEs with good CMR that can avail of business loans at competitive interest rates. One of the favourite of MSMEs to choose is business loans from SBI, among other leading private and public sector banks and NBFCs.
Let’s further discuss some of the benefits of CIBIL score and CIBIL MSME Rank (CMR):Â
- Lower Interest rates on Loans
- Quick Approvals on Credit Lines
- Improves Negotiation Power with banks and NBFCs
- Instant Approval of Loans and Credit Cards
- Higher Loan AmountsÂ
- Greater Limits on Credit Cards
- Pre-Approved Loans with low-interest rates
- Option to choose long-term repayment tenure
- Secures Financial Future
Features & Benefits of CIBIL MSME Rank (CMR)
Features of CMR
- CMR Range: CMR1 – CMR10, CMR1 being the Best, and CMR10 as the Worst Rank.
- Forecasts the possibility of an MSME becoming NPA in the next 12 months
- Calculated on the basis of 24 months of the MSME’s credit history on the credit bureau
- Applicable to MSMEs with collective commercial borrowings between Rs. 10 Lakh and Rs. 10 Crore
- Calculated on over 7 years of through-the-cycle (TTC) credit history
- Approx. 27 lakh MSMEs are eligible to be ranked on CMR
Benefits of CMR
- Avail loans at lower interest rates
- Applicable throughout the loan cycle
- Effective lending decisions for MSME lending
- Provides risk-based pricing for MSME loans
- Determines the credit risk associated with borrower
- Monitors risk transition of borrowers
- Manages portfolio health
- Helps in implementing risk mitigation and business expansion
- Defines limit for the borrowers
- Rule-based limit setting
CIBIL score and CMR are possibly the two most important features of TransUnion CIBIL that enable millions of individuals, businesses, MSMEs, enterprises, organizations, banks, NBFCs, housing finance companies, and many other financial entities to take risk-free, beneficial, and informed decisions related to banking and financial products in the lending industry or any credit-related feature, facility or service.
Satpal Yadav
Satpal Yadav is a content writer with a specialization in the field of personal finance. He writes to educate people and solve common queries related to government schemes and personal finance.
PS: We have no association with any Credit Rating agencies like CIBIL, Experian, Equifax, or CRIF High Mark – which are the only Credit Rating Agencies in India