SBI developing solution to use UPI data for checking creditworthiness of small business

State Bank of India (SBI) is developing a solution to use UPI data as a proxy to assess a small business entity’s creditworthiness when it lacks GST registration, a top official said on Friday.The country’s largest lender is confident it can provide end-to-end digital loans within a day for such borrowers, its Managing Director Ashwini Kumar Tewari said here, adding that this will help assuage concerns about such businesses being left outside formal finance.”UPI (Unified Payments Interface) can substitute GST (goods and services tax) if regular sales are happening. We are developing a UPI solution (for businesses) without GST, and we will use that (UPI transactions) as a proxy for sales,” Tewari said.The bank has been able to solve lending challenges for the businesses registered with GST, and is in a position to lend within ten minutes, he said, speaking at the annual Global Fintech Fest here.Over the last 18 months, it has written loans of Rs 1 lakh crore using GST and PAN data, which gives an insight into the cash flow of a business, he added.However, there are difficulties in the case of businesses not having a GST number, he said, pointing out that this is where alternative data inputs become important.Explaining “frictions” on the UPI payments front, he said the lender bank does not have any clarity over where the money is going, but the receiver bank and third-party payments app facilitating the transaction have the data.Using customer consent, the bank can establish creditworthiness by deploying models that look for UPI payments and other inputs like data from telecom companies, he said.The bank hopes to provide small business loans using the new data inputs, Tewari said, adding that this will help solve the credit challenges for Bharat.

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