Evaluating Drift-Aware Risk Ranking for Capacity-Constrained MSME Credit Early Warning Systems
Keywords:
MSME credit risk, early-warning system, concept drift, risk ranking, uncertainty estimation, selective prediction, review-budget allocationAbstract
Lenders need to identify MSME repayment stress early, but review teams can contact or investigate only a limited shareof accounts at a time. This paper proposes a budget-constrained warning queue that ranks accounts by calibrated short-horizon stress risk and, when validated loss and review-cost estimates exist, by expected loss per unit of review effort.
References
[1] Reserve Bank of India, “Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises (MSMEs),” FIDD.MSME & NFS.BC.No.21/06.02.31/2015-16, Mar. 17, 2016.
[2] Reserve Bank of India, “Frequently Asked Questions: Micro, Small and Medium Enterprises,” sections on revival and rehabilitation and identification of incipient stress. [Online]. Available: https://www.rbi.org.in/commonperson/English/Scripts/FAQs.aspx?Id=966. Accessed: Oct. 16, 2026.
