Why Manual Supply Chain Finance Is Bleeding Money — And How LOS-LMS Automation Fixes It
A profitable MSME gets rejected. A weaker borrower gets approved.
This happens every day in Indian lending — not because of bad intent, but because underwriting models are stuck in the past.
Credit scores alone cannot capture the reality of how Indian MSMEs operate. Cash flows, GST filings, and banking behavior tell a far more accurate story.
📉 Why CIBIL-Only Models Fail MSMEs
- • Thin or non-existent credit history
- • Under-reported audited income
- • Rapidly changing cash-flow cycles
- • Heavy UPI and digital transaction usage
GST Data: India’s Most Powerful Underwriting Signal
GST has created the largest verified financial dataset in India. Unlike balance sheets, GST returns are filed directly with the government and updated monthly.
Modern lenders now analyze GST data to assess real business performance — not just reported numbers.
- Implied turnover based on filings
- Buyer quality and anchor concentration
- Seasonality trends and volatility
- Tax compliance behavior
Platforms like CarmaOne Credit Insights convert raw GST data into lender-ready risk signals.
Bank Statement Analysis: The Truth Serum
Bank statements reveal how a business actually operates — not how it wants to appear on paper.
AI-driven analysis processes 12 months of statements in seconds, uncovering risks that manual underwriting would miss.
Hidden Liabilities
EMI and lender repayments not yet reflected in bureau data
Circular Transactions
Related-party fund movements inflating turnover
Bounce Patterns
Utility, vendor, and EMI bounce behavior
Cash Dependency
Ratio of cash vs digital inflows
The Role of Account Aggregator (AA)
The AA framework allows lenders to access tamper-proof banking data directly from financial institutions with borrower consent.
This eliminates PDF forgery and significantly reduces fraud risk in digital lending journeys.
The Future: Composite Risk Scoring
Forward-looking lenders no longer rely on a single score. Instead, they use composite risk models that combine multiple data sources.
- 30% Credit Bureau (historical behavior)
- 40% GST & banking cash flows
- 20% Alternative data & litigation checks
- 10% Sectoral and macro trends
Final Thoughts
The biggest lending opportunity lies in borrowers who are credit-worthy but credit-invisible.
Lenders who embrace GST and cash-flow-based underwriting will grow faster with lower default risk.
👉 Learn how CarmaOne Credit Insights helps lenders unlock the MSME market safely.