Alternative data key to providing credit to the uncovered: TransUnion CIBIL COO

Our Bureau New Delhi | Updated on October 24, 2019

10 economies including India implement one-fifth of all reforms: World Bank report

India’s significant improvement in the World Bank’s Ease of Doing Business ranking (it jumped 14 ranks to reach 63) was based on improved performance in six of the 10 parameters measured.

The one area where its performance fell was in registration of properties. In three areas — getting credit, protecting minor investors and enforcing contracts, it fared the same as last year.

To improve India’s ‘getting credit’ ranking, it is essential to drive inclusion of alternative data in the ambit of credit bureau coverage to include larger sections of the society who may not have a footprint in the formal credit sector, said Harshala Chandorkar, Chief Operating Officer, TransUnion CIBIL. “Alternative payment data such as data on records of payment on electric, telecommunications and other recurring obligations can serve to evaluate the risk to those potential borrowers that are outside the credit mainstream,” he said.

India’s ranking in the index had gone up 23 places to 77 last year in World Bank’s Ease of Doing Business 2019 report. Those economies that score well in doing business tend to benefit from higher levels of entrepreneurial activity and lower levels of corruption, the report said.

While economic reasons are the main drivers of reform, the advancement of neighbouring economies provides an additional impetus for regulatory change.

Reforms record

The top 10 economies with most noted improvement, including India, Saudi Arabia, Jordan, Togo, Bahrain, Tajikistan, Pakistan, Kuwait, China, and Nigeria, implemented one-fifth of all the reforms recorded worldwide in 2018-19, the report said.



By documenting changes in regulation in 12 areas of business activity in 190 economies, Doing Business analyses regulation that encourages efficiency and supports freedom to do business, the report said. The two parameters that are not included in the ranking process are regulation on employing workers and contracting with the government.

As per the report, India made starting a business easier by abolishing filing fees for the SPICEe company incorporation form, electronic memorandum of association and articles of association. It streamlined the process, reduced the time and cost of obtaining construction permits and improved building quality control by strengthening professional certificate requirements.

India made trading across borders easier by enabling post-clearance audits, integrating trade stakeholders in a single electronic platform, upgrading port infrastructures and enhancing the electronic submission of documents.

Resolving insolvency was made easier by promoting reorganisation proceedings in practice. India also made resolving insolvency more difficult by not allowing dissenting creditors to receive as much under reorganisation as they would receive in liquidation, the report added.

Published on October 24, 2019

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