Canara Bank launches new loan model for SMEs

Canara Bank has launched a credit scoring model for financing medium and small enterprises.

According to RK Dubey, Chairman and Managing Director, Canara Bank, 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. It is also expected to increase financial inclusion under the sector.

The model helps branch managers decide the eligibility of borrowers under the MSME sector to avail finance from the bank. 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 scoring model will be used solely for the purpose of deciding the eligibility of the loan applicant to avail finance from the bank.