Jocata and SIDBI Collaborate to Launch Sumpoorn MSME Economic Activity Index for Enhanced Insights

Jocata, a digital lending transformation platform, has partnered with the Small Industries Development Bank of India (SIDBI) to introduce Sumpoorn, an innovative MSME Economic Activity Index. This index is designed to monitor the health of India's MSMEs, which are crucial to the economy, contributing over 25% to the Gross Value Added (GVA) and more than 40% to total exports.

Sumpoorn stands out from existing macro indices by using a unique approach. It is a composite diffusion index that adjusts for relative amplitude and is developed from anonymized monthly sales data. This data is sourced from GSTN returns of over 50,000 credit-seeking MSMEs. A team of experts has meticulously tracked this index over four years to ensure it accurately reflects the MSME economy and the effects of macroeconomic shifts.

The MSME sector's importance to India's economy is widely recognized. However, a lack of data often poses challenges for industry stakeholders and policymakers. Sivasubramanian Ramann, SIDBI's Chairman & Managing Director, highlighted the need to address this data gap. He stated, "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."

Prashant Muddu, Managing Director and CEO at Jocata, emphasized Sumpoorn's role in closing the MSME knowledge gap. He noted, "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 has facilitated digital transformation for over 50 major financial institutions across India, ASEAN, and the Middle East. With Sumpoorn's launch, Jocata continues its commitment to innovation by providing data-driven insights that bolster MSME growth in India.

Insights from Sumpoorn

The introduction of Sumpoorn by Jocata and SIDBI represents a crucial step in addressing data deficiencies in the MSME sector. By utilizing GST data alongside advanced analytics, Sumpoorn offers valuable insights into MSME performance and challenges. This empowers policymakers, financial institutions, and researchers to make informed decisions and develop targeted strategies that support this vital sector's growth.

This initiative underscores the significance of bridging information gaps within India's economic framework. By equipping stakeholders with precise data on MSMEs' economic activities, Sumpoorn aims to enhance strategic planning and policy formulation.