- Nachiket Kulkarni
Microentrepreneur Assessment: V-Score
Updated: May 18, 2021
Entrepreneur and Enterprise Evaluation for various purposes is an evolving field over the last decade, accelerated especially by digital lending and microfinance industries. Multiple tools, such as The Myer-Briggs Test and Psychometric tests have been used over the years to judge the entrepreneurial potential of an individual. In addition, there are several established procedures for enterprise assessment, where financial metrics like Earnings Per Share (EPS), Price to Earnings Ratio are used as common indicators. These indicators are in turn derived from the Balance Sheet, Income Statement & Cash Flow Statements.
Methodologies are established by Venture Capitals, new-age fintech and other lending agencies to evaluate the financial health of formal small & medium enterprises. Outside of India, firms like Tala have managed to overcome this with innovative algorithms around the borrowers' social media or telecom history and such. In India though, this sector is marked by several regulatory constraints and B2C lending apps still have a long way to go, especially for the informal sector.
While these processes are evolving for the lending sector, there is nothing out there for evaluating an informal enterprise or a microenterprise (or a solo-entrepreneur / homepreneur), on the extent of their digital presence, willingness or capacity to go digital, potential brand equity, and such parameters. Since this is a regular problem that Vendo faced especially to plan training-led digital interventions, it led to the genesis of 'V-Score'.
What is 'V-Score' & How does it work?
V-Score is a Vendo proprietary analytical model with a weighted output from 0 to100, derived from screening calls with microenterprises. V-Score assists Vendo to classify its enterprise beneficiaries into different buckets of digital training interventions, based on the range of respective V-Scores. V-Score is the result of proportionally weighted averages across parameters covering entrepreneur profile, digital presence, market scope, and such.
The lower the 'V-Score', the lesser is the current digital & branding presence of the microenterprise, and so on.
Follow our Social media pages to understand how microenterprises are evaluated and how Vendo's training interventions improve their 'V-Score', as they adapt to run their businesses in the new normal.