New Delhi, Jan 25 (KNN) Credit penetration is particularly low for Micro, Small and Medium Enterprises (MSME) sector where the ticket size is generally believed to be between one to ten million rupees, said Viral Acharaya, Deputy Governor of the Reserve Bank of India (RBI).

He said that in an emerging economy like India, it is always felt that the smaller entrepreneurs, mostly operating under the informal economy, do not get enough credit as they are informationally opaque to their lenders.

Thus to solve the information problem that affects access to credit for micro entrepreneurs, RBI has initiated work on a Public Credit Registry (PCR).

The PCR has been envisaged as a database of core credit information-an infrastructure of sorts on which users of credit data can build further analytics.

It will strive to cover all regulated entities (i.e., financiers) in phases and in this way get a 360-degree view of borrowers. It will facilitate linkages with related ancillary information systems outside the banking system including corporate filings, tax systems (including the Goods and Services Network or GSTN), and utility payments, said Acharya in a speech, uploaded on the RBI’s website on Thursday.

He said “The High-Level Task Force recommended that a separate Public Credit Registry Act (PCR Act) be brought in.”

The PCR Act will need to ensure adequate safeguards on data while at the same time address extant restrictions on sharing of credit data that prevent efficient allocation and regulatory supervision of credit.

 The PCR Act would also have to be comprehensive so as to bring in data from the section of lenders who do not directly fall under the RBI regulations, he added.

To this end, he said that the RBI plans to engage with the Government and other regulators in the coming months. In the meantime, the RBI has set up an Implementation Task Force that is putting the systems infrastructure in place to kick-start the PCR with data from regulated entities that can be covered either under, or with minor tweaking, of the extant legislative framework

The PCR will have to be backed and governed by a comprehensive Public Credit Registry Act to be brought in consultation with the Government. It will have to follow the latest privacy guidelines based on a laid down consent framework, added Acharya.

He said that fundamental change in the financial data infrastructure such as a Public Credit Registry can help improve access to micro credit.