New Delhi, May 26 -- Traditional lending systems were built for borrowers with formal income records, strong credit histories, and structured financial documents. But many small businesses do not operate that way. Many MSMEs, even today, face challenges obtaining loans. Many of them have seasonal incomes, records may be informal, and cash flows may not always fit into standard lending models.

While businesses need capital to grow, lenders often struggle to assess their real repayment ability. And that is why data-driven risk strategies are important for facilitating access to credit.

MSME lending today no longer relies solely on traditional credit checks. It has moved toward a broader and more practical understanding of business health....