MSMEs (Micro, Small and Medium Enterprises) has been a significant contributor to India's GDP, manufacturing output, and exports. However, despite this huge impact of MSMEs on the Indian Economy, the sector is always crippled by the lack of access to credit. Analytics India Magazine spoke with Abhishek Singh, the Chief Analytics Officer at Lendingkart, to understand how the company is leveraging machine learning algorithms with digital data to develop alternative underwriting mechanisms for the MSME sector. "As the majority of businesses in this segment are from the unorganised sector, barely possessing any recorded financial history, they have to resort to informal sources to address their financial requirements suited to their business model. As a result, they end up paying higher rates on loans borrowed, clogging their business growth, and even keep high collateral for these loans," said Singh.

Budget 2020: India has made rapid strides in expanding the MSME (Micro, Small and Medium Enterprise) sector and adopting digital technologies. Technologies like Artificial Intelligence (AI) offer great promise and raise apprehensions at the same time and it will take the concerted efforts of all key stakeholders in the ecosystem to create a framework for maximum benefit while acknowledging the challenges in the most pragmatic manner possible. Here, we seek to explore how best the AI technology toolkit can accelerate business performance for MSMEs; followed up with a set of recommendations for the key stakeholders in this arena. The time is right and it is now. Embedding AI across key business functions has the potential of driving exponential impact on key business levers- innovation, growth and efficiency.