Now universal enterprise IDs for small firms
ECONOMY & POLICY

Now universal enterprise IDs for small firms

According to an internal document, the Union government is working on a Universal Enterprise ID system to help strengthen the credit ratings of small businesses, which are the engines of the Indian economy.

A group of MSMEs will form a special purpose vehicle (SPV) under the proposal, which may be announced in the Union budget, to borrow from banks in a single transaction and on-lend to its members.

Credit rating agencies are also expected to develop new models for assessing the creditworthiness of MSMEs.

In 2019, an expert committee on micro, small, and medium enterprises (MSMEs) led by former Sebi chairman U.K. Sinha proposed the enterprise ID to improve credit availability to these entities. According to the 73rd round of the National Sample Survey, India has approximately 63.39 million MSMEs (NSS).

The Sinha committee recommended making MSME rating products more relevant and predictive of credit performance by encouraging rating agencies to build more 360-degree scoring models using newer data sources such as utility bills and tax payments, among others.

"The implementation of a Universal Enterprise ID will help this market. Rating agencies may need to develop newer offerings to encourage the growth of cash flow-based lending. "Banks must specify the workflow in their credit appraisal process if the MSME has a credit rating available to it," the committee stated in a report.

The Sinha committee report found that there is no common identifier through which an entity or enterprise can be recognised, referenced, and electronically verified, and enterprises "face problems when they approach other authorities for any permissions".

The panel sought to implement enterprise ID using PAN on a mission-mode basis in order to ensure credit availability to MSMEs.

Emails sent to the ministries of micro, small, and medium enterprises and finance went unanswered as of press time.

According to an internal document, the Union government is working on a Universal Enterprise ID system to help strengthen the credit ratings of small businesses, which are the engines of the Indian economy. A group of MSMEs will form a special purpose vehicle (SPV) under the proposal, which may be announced in the Union budget, to borrow from banks in a single transaction and on-lend to its members. Credit rating agencies are also expected to develop new models for assessing the creditworthiness of MSMEs. In 2019, an expert committee on micro, small, and medium enterprises (MSMEs) led by former Sebi chairman U.K. Sinha proposed the enterprise ID to improve credit availability to these entities. According to the 73rd round of the National Sample Survey, India has approximately 63.39 million MSMEs (NSS). The Sinha committee recommended making MSME rating products more relevant and predictive of credit performance by encouraging rating agencies to build more 360-degree scoring models using newer data sources such as utility bills and tax payments, among others. The implementation of a Universal Enterprise ID will help this market. Rating agencies may need to develop newer offerings to encourage the growth of cash flow-based lending. Banks must specify the workflow in their credit appraisal process if the MSME has a credit rating available to it, the committee stated in a report. The Sinha committee report found that there is no common identifier through which an entity or enterprise can be recognised, referenced, and electronically verified, and enterprises face problems when they approach other authorities for any permissions. The panel sought to implement enterprise ID using PAN on a mission-mode basis in order to ensure credit availability to MSMEs. Emails sent to the ministries of micro, small, and medium enterprises and finance went unanswered as of press time.

Related Stories

Gold Stories

Next Story
Resources

Schindler named among Forbes’ World’s Best Employers 2026

Schindler has been named among Forbes’ World’s Best Employers 2026, a global ranking recognising companies for their workplace environments.Compiled by Forbes in partnership with Statista, the ranking is based on independent employee feedback, including whether employees would recommend their organisation to friends and family.The company said the recognition reflected its focus on creating a workplace where employees can develop their expertise and build careers. ..

Next Story
Infrastructure Urban

India needs an export-execution mindset: Vishesh Jain

Interview with Vishesh Jain, Founder & CEO, EximpleWhat gaps in India’s global trade ecosystem led you to build Eximple, and what problem did you see businesses struggling with most?Eximple came out of a problem that all three founders had seen from different choke points in the trade ecosystem. India has millions of MSMEs and manufacturers, and many of them can make products that are genuinely competitive on quality. Yet only a small fraction is able to build meaningful international businesses. In our experience, the gap is usually not manufacturing capability; it is the ability to exe..

Next Story
Building Material

Nuvoco reports 13.5% revenue growth in Q2 FY27

Nuvoco Vistas Corp. Ltd. reported consolidated revenue of Rs 27.9 billion for Q2 FY27, up 13.5% year on year. Cement sales volume rose 9% to 4.7 million tonnes (MMT), while EBITDA increased 11% to Rs 4.11 billion.The company said it began its cement operations in 2014 with a 2.3 MMT per annum (MMTPA) operation at Nimbol. It now aims to reach 35 MMTPA of cement capacity by FY28, nearly 15 times its initial capacity. Its portfolio spans cement, ready-mix concrete and modern building materials.On sustainability and cost efficiency, Nuvoco partnered with CleanMax for a 46.4 MW wind-solar hybrid re..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code