Mumbai: Ratings firm Crisil and MSME lender Sidbi signed a Memorandum of Understanding (MoU) to launch CriSidEx, a sentiment Index for Micro, Small and Medium Enterprises (MSME). The index will indicate the current state and expected outlook on the MSME sector every quarter.

The Sentiment Index is expected to provide crucial insights into employment, business environment and foreign trade. Data on MSMEs comes with a significant lag, so there is no way to regularly aggregate and assess the ground situation amongst wide range of disparate enterprises spread across India.

“Given the government’s agenda of ensuring inclusive growth, a leading indicator that reflects the business predicament and tidings of the MSME sector is crucial. CriSidEx is designed to do exactly that because it will gather real-time, ground-level information directly from the MSMEs ” said Ashu Suyash, Crisil MD and CEO.

As per the arrangement, the CriSidEx survey will cover over 1,000 MSMEs using a structured questionnaire to ensure consistency in methodology and capture information sans significant deviations. The sample will have representation based on size, geography and nature of business and across different legal entities.

Apart from the government and MSMEs themselves, the survey and CriSidEx will provide intelligence and insights for regulators, trade bodies, lenders as well as economic & financial analysts.

CriSidEx will also help in forecasting the business environment because it will capture sentiment on various business parameters such as the business situation, capacity utilisation, order book and margins. It will flag potential headwinds and changes in production cycles and thus help improving market efficiencies.