Digital lending transformation partner Jocata has collaborated with SIDBI, the principal financial institution for MSME development, to launch an MSME Economic Activity Index—Sumpoorn. This MSME-specific high-frequency indicator will capture the state of India’s growth engine, it is MSMEs, which contribute more than a quarter of India’s overall Gross Value Added (GVA) and more than 40 per cent of India’s total exports.

Currently, available macro indices capture business expectations and rely on opinion or survey-based data. Jocata Sumpoorn aims to bridge this gap and allows for a deeper interpretation of the changes in the MSME sales activity. 

It is a relative amplitude-adjusted composite diffusion index developed using consent-led and anonymised monthly sales data reflected in official GSTN returns of more than 50,000 credit-seeking MSMEs over time. A team of credit experts, data scientists and senior economists have built and tracked the Index over the past four years, ensuring its ability to accurately represent the MSME economy and capture the impact of macroeconomic conditions. 

Sivasubramanian Ramann, chairman and managing director at SIDBI, said that due to data paucity on the MSME sector often becomes a challenge for industry members and policymakers. “SIDBI has been constantly engaged for the development of the sector and has been partnering with institutions to bridge the information asymmetry to enable informed decision-making by stakeholders. It is in this spirit we have created ‘Sumpoorn’ with Jocata, which carries an index measuring the economic activity of the MSMEs leveraging the GST data,” he stated.

The underlying authentic data of GST provides credibility to the Index. With “time, the same can be expanded to include more dimensions. I hope the Index shall be of value to the readers and provide a rich perspective on the prevalent trends of the MSME sector,” Ramann added.

Prashant Muddu, managing director and CEO at Jocata, said that Sumpoorn is a fact-based measure of MSME sales performance representative of the latest economic activity. “It will address the MSME knowledge gap and empower financial institutions, policymakers, economists and researchers to strategize credit flow and create tailored policies for the sustainable growth of MSMEs across the country. To provide in-depth and granular MSME insights, we are further developing sub-indices that will identify growth opportunities, provide early warning signals and channelize capital allocation to different sectors (as classified under GST by HSN) and clusters across geographies,” he added.

Jocata (a subsidiary of BillDesk) has successfully enabled over 50 large financial institutions in India, ASEAN and Middle East to embark on their digital transformation journeys. Their MSME inclusion approach can be traced back to 2021 when they launched India’s first AI/ML-based score (SME DNA) that provides a deep understanding of an entity’s performance across business cycles, powering near-instant credit decisions and faster disbursals.

Founded in 2010 and headquartered in Hyderabad, Jocata specialises in digital lending using credit automation, smart decisions and intelligent monitoring. The highly configurable and low-code digital lending platform is purpose-built to enable financial institutions to achieve world-class customer experience, reach new customer segments, launch products faster, increase speed-to-credit and drive ecosystem strategy.