New Delhi, Sept. 29 -- Banks and non-banking finance companies (NBFCs) are strengthening their underwriting models as early signs of stress surface in the micro, small and medium enterprise (MSME) sector.

Rising delinquencies, especially in small-ticket loans, are pushing lenders to adopt more data-driven and nuanced credit assessment frameworks.

Kotak Mahindra Bank sees rural India as a major growth driver over the next five to seven years. "We're expanding our distribution and leveraging data analytics to improve credit assessment and risk management," said Manish Kothari, group president & head - commercial banking.

Lenders are increasingly relying on alternative data such as GST filings, cash-flow patterns, verified transactions, u...