What types of loan applicants are the most likely to repay in India? Are the most successful entrepreneurs risk-takers, innovators, or optimists? A great challenge lenders in India face is in assessing the risk involved in extending loans to micro, small and medium enterprises (MSMEs). Such companies are a large part of India’s industrial landscape—85% of Indian manufacturing happens in companies with less than 49 employees. And yet, such enterprises, especially the smaller ones, often don’t have continuous documentation of banking and credit histories and other records or good quality collateral that traditionally help lenders assess risk. Our organization, the Entrepreneurial Finance Lab (EFL), solves this problem by helping lenders adopt a different approach—assessing risk by creating a psychometric profile of a borrower. Our data and experience around the world show unambiguously that personality is a pretty good predictor of how likely a person is to repay loans. Our partners across India have administered our psychometric credit assessments in over 15 Indian states. We have analyzed over 10,000 applicants’ characteristics in relation to default behaviour specific to the local lending market that caters to the MSME segment. This allows us to define some characteristics of what makes a good borrower in the Indian MSME market.

At a time when non-performing loans are above 15% and could top 25% by year end, Alan Goodrich, Financial Clearing Bureau General Manager talks to Newsday’s columnist Omen Muza about the SMEs Rating Programme. This programme is a new business line the company recently launched partly to counter the problem of rising NPLs and mainly to improve SMEs’ access to credit.

India's first female-run and -managed public sector bank was inaugurated on November 19, 2013 in the presence of the country's bureaucratic and political elite, a date chosen to coincide with the anniversary of Indira Gandhi's birth. The Bharatiya Mahila Bank (BMB) is supposed to exclusively serve women through its focus on livelihood issues, women-run businesses that support self-help groups, and gender-related aspects of empowerment and financial inclusion (though the bank's website indicates that men can also open accounts and take out loans). The government infused it with approximately $170 million.While the institution may have good intentions, the timing of its launch just prior to the recent elections seemed more designed to feather the cap of the former government than to deliver real benefits. Some critiques follow below.

In this blog post we will take a look at InVenture’s unique approach to credit scoring unbanked communities in the hope of extending access to loan products to those people outside of formal financial systems.

Financial Inclusion is the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society. Mobile money projects have been hailed as potential tools to increase financial inclusion; however, consumer adoption has been mixed. This post will introduce a new, more holistic approach for digital cash which may contribute toward greater financial inclusion.

Intellecap Impact Investment Network (I3N) and Infuse Ventures have invested $500,000, or Rs 3 crore, in Coimbatore-based solar agriculture startup Surya Power Magic. I3N, which is an angel network investing in social enterprises, saw members including solar panel manufacturer Waaree Group and family office Kshatriya Ventures participate in the deal. Infuse Ventures is a Rs 110 crore fund promoted by IIM Ahmedabad's Centre for Innovation Incubation and Entrepreneurship (CIIE) and focusing on the clean tech sector.