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Canara Bank launches credit scoring model to finance SMEs

Mumbai, May 13 (KNN) With the view to reducing the rejection rate of MSME loan applications, Canara Bank has launched a credit scoring model for financing medium and small enterprises.
The credit scoring model helps the branch managers decide the eligibility of borrowers under the MSME sector to get loans from the bank and is expected to increase financial inclusion under the sector.
According to Chairman and Managing Director of Canara Bank, RK Dubey, the scoring model will reduce the arbitrariness and subjectivity in deciding the eligibility for loans and help in reducing the rejection rate of MSME loan applications, reports media.
The eligibility is decided based upon aggregate scores secured by the loan applicant on various parameters prescribed under behavioural, management, business and financial aspects.
The model was launched here yesterday by Executive Director, Reserve Bank of India (RBI), Deepali Pant Joshi.