Mumbai, Mar 1 (KNN)  Credit Information Bureau (India) Ltd (CIBIL) has launched a credit ranking system for micro, small and medium enterprises (MSMEs) to measure riskiness of a borrower and probability of a company turning into non-performing asset (NPA).

According to credit information bureau - TransUnion Cibil, close to Rs 55,000 crore worth bank loans to micro small and medium enterprises (MSME) are close to default.

The forecast is based on a machine learning algorithms to predict default probability based on its credit history data. The rank ranges from a scale of 1 to 10 with one being the least likely to default and 10 being the most.

The Credit in MSME Sector has grown at 11% last year but the stress in MSMEs continues to build with the NPA rate at 8.7%.

TU Cibil will let the lenders know about the credit risk rank for small and medium businesses.

TU Cibil, formerly Cibil, was renamed after local lenders ICICI Bank and Bank of Baroda sold their stake to foreign partner Transunion last year. TransUnion now holds over 77% stake in the bureau.