Loss Given Default Estimation using Transition Matrix (TM-LGD): A Case Study
In line with its aim to plug the existing gaps in finance with respect to lending to the Micro, Small and Medium Enterprises (MSMEs), IFMR Capital (presently known as Northern Arc Capital) has started to explore ways to devise an effective and replicable lending model catering to it. Currently it intends to study enterprises in areas being served by the KGFS branches and those operating in the food processing sector. The rationale for such a foray is obvious considering the large size of the SME segment and also the challenge and opportunity that it presents.