Business Financial Resilience Index Model Development Methodology

Seymour Financial Resilience Index ®

There has been a robust development methodology for the MSME Business Financial Health and Resilience Index, with high-level steps outlined below.

The MSME Business Financial Health and Resilience Index has been developed through a multi-year, evidence-informed process encompassing foundational research, framework and indicator development, country-specific empirical studies, model development and iteration, analytics, and consultation to support real-world application.

Step One: Foundational Research, Business Financial Health Framework and Indicator Development (2021–2024)

Study of MSME business financial health and development of the Institute’s foundational Business Financial Health and Resilience Framework. This phase included the Institute’s development, contribution and validation of MSME financial health indicators provided to UNEP-FI, as well as engagement with financial institutions and other organizations working with MSMEs.

Step Two: India MSME Business Financial Health and Resilience Study Design and Empirical Research (2024–2025)
Design and implementation of the India MSME Business Financial Health Study, providing an empirical evidence base for examining priority dimensions and indicators of MSME business financial health and informing development of the India report, published in October 2025.

Step Three: Initial Model Development and Indicator Alignment (2025)
Development of initial models using the India MSME study data, with a focus on priority indicators aligned with the foundational Framework. This phase established the basis for translating the conceptual Framework and underlying indicators into an empirical measurement model.

Step Four: Development of the Canada MSME Business Financial Health and Resilience Study, Analytics and Real-World Application (2025–2026)

Design and implementation of the Canada MSME Business Financial Health and Resilience Study, including advanced analytics and report development. Select consultations were also undertaken to inform the practical application of the research and measurement approach in real-world contexts. The Canada report was published in March 2026.

Step Five: Index Development and Iterative Model Refinement (2026)

Development of the MSME Business Financial Health and Resilience Index using the Canada MSME study data, building on the India models development and consultations. This phase involved multiple model iterations to refine and strengthen the Index and its underlying measurement approach.

The Business Financial Health and Resilience Index Model is a strong model. The eight indicators account for 63 percent in the variance in the business financial health and resilience construct as of December 2025. All indicators are significant at a 95% confidence interval, with p-values less than 0.05.

The Index model is designed to be further refined and enhanced over time, including through the development and validation of country-specific indicators, where appropriate, to reflect local market contexts, MSME characteristics, and priorities.

  • The Business Financial Health and Resilience Index Model, Seymour Financial Resilience Index ® is a proprietary regression model developed based on an iterative process to regressing and evaluating over 42 potential indicators against the self-reported financial health and resilience construct, using the multiple linear regression technique.
  • Indicators were developed in line with the MSME Business Financial Health and Resilience Framework, including business financial health, business financial resilience and business owner financial wellness/ stress indicators. The model combines financial behavioural, operational, financial stress and protection-related indicators, amongst others, to provide a holistic picture of MSMEs’ business financial health and resilience [1,2,3].
  • In the end, eight variables were determined to account for 63.4 percent of the variance in the business financial health and resilience construct as of December 2025, based on the final adjusted R².
  • The model was developed using Canada and India Small and Medium Enterprise (MSME) Business Financial Health and Resilience Studies datasets with over 15 model iterations developed, tested, and reviewed [4]. There were six stages of the Index model development [5].
  • The eight indicators in the model were selected based on their statistical contribution to the business financial health and resilience construct; conceptual fit with the framework, interpretability, and practical relevance for small and medium-sized enterprises.
  • The regression model indicators (independent variables) are significant at a 95% confidence interval, with p-values less than 0.05.

The MSME Business Financial Health and Resilience Study Instrument has been designed for independent longitudinal measurement, enabling changes in MSME financial health and resilience to be tracked over time. The instrument can also incorporate additional country- or organization-specific indicators and questions, as appropriate.

These can include indicators related to key levers that MSMEs can act on directly, as well as levers available to policymakers, financial institutions and other stakeholders. The instrument can also support measurement of interventions received by MSMEs and associated financial health and resilience outcomes.

The study instrument has been developed to enable customized questions and analytics for clients and partners across different markets and contexts.

The Institute also develops customized studies and proprietary measurement solutions, drawing on its expertise in SME business financial health and resilience, impact measurement, and innovation methodologies. Please contact us for further information.

The high-level technical note on the Index is available here, with a more detailed technical note available for clients and partners utilizing the Index.