SIDBI launches MSME Economic Activity Index – Sumpoorn in collaboration with Jocata

Mumbai, November 10: Jocata, a digital lending transformation platform, has collaborated with the Small Industries Development Bank of India (SIDBI) to launch a one-of-its-kind MSME Economic Activity Index called Sumpoorn. This MSME-specific high-frequency indicator will capture the state of India's growth engine, its MSMEs, which contribute more than a quarter of the country's overall Gross Value Added (GVA) and more than 40 percent of its total exports.

Understanding Sumpoorn

The currently available macro indices capture business expectations and rely on opinion or survey-based data. Sumpoorn, on the other hand, is a relative amplitude adjusted composite diffusion index developed using consent-led and anonymized 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.

Significance of MSME sector

The significance of the MSME sector for the Indian economy is a well-acknowledged fact. However, data scarcity on the MSME sector often becomes a challenge for industry members and policymakers. Sivasubramanian Ramann, Chairman & Managing Director at SIDBI, emphasized the importance of addressing this data gap and creating an index that measures the economic activity of MSMEs leveraging GST data. He said, "We at SIDBI have been constantly engaged for the development of the sector and have 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, that carries an index measuring economic activity of the MSMEs leveraging the GST data."

Addressing the MSME knowledge gap

Prashant Muddu, Managing Director and CEO at Jocata, highlighted the significance of Sumpoorn in addressing the MSME knowledge gap and empowering various stakeholders. He said, "Jocata Sumpoorn is a fact-based measure of MSME sales performance representative of the latest economic activity. We believe 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."

Jocata's digital transformation journey

Jocata has enabled over 50 large financial institutions in India, ASEAN, and the Middle East to embark on their digital transformation journeys. With the launch of Sumpoorn, Jocata continues to drive innovation and provide data-driven insights to support the growth of MSMEs in India.

The launch of the MSME Economic Activity Index - Sumpoorn, by Jocata and SIDBI, marks a significant step towards bridging the data gap in the MSME sector. By leveraging GST data and advanced analytics, Sumpoorn will provide policymakers, financial institutions, and researchers with valuable insights into the performance and challenges faced by MSMEs. This will enable them to make informed decisions and create targeted interventions to support the growth and development of this vital sector, which is the backbone of the Indian economy.