Assess the SME Margins and Incidence of Unaccounted Turnover to assess Loan Eligibility of a Potential Customer

Financial Services Consulting

Client Challenge

A leading financial services company in India was into a lending business to the small and medium enterprises (SMEs) segment in India. They requested UC Strategy to assess the SME margins and the incidence of unaccounted turnover to assess the loan eligibility of the potential customer.

Our Approach

To assess the SME margins and incidence of unaccounted turnover, UC Strategy adopted the following approach:

  • Consolidated 200+ product segments given by the client to about 125 product segments based on the similarity of nature and the value chain of products
  • Mapped the entities across the value chain, and ascertained the following through primary research –
    • Margins and incidence of black money across value chain entities
    • SME concentration for each segment
    • Drivers/suppressors likely to affect margins in the future
  • Secondary research was conducted to understand –
    • Value chain of the industries
    • Market size and growth of industries
    • Organised v/s unorganised share in the industry
    • SME concentration in the industry
    • Margins of players and future trends likely to affect margins

Our Impact

The client could assess the loan eligibility of a potential customer based on his reported turnover, value chain presence and industry segment using our margins and incidence of black money figures.

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