Public Sector Banks (PSBs) have sanctioned more than 3.96 lakh loan applications worth over ₹52,300 crore to Micro, Small and Medium Enterprises (MSMEs) under a new Credit Assessment Model (CAM) based on digital credit underwriting between April 1 and December 31, 2025.
According to Finance Ministry, the digital credit assessment model, launched by PSBs in 2025, leverages borrowers’ digital footprints to enable faster, data-driven and objective appraisal of MSME loan applications. The system uses digitally fetched and verifiable information available in the financial ecosystem to automate loan processing for both existing and new MSME customers of banks.
Under the model, digital footprints are used for key processes such as KYC authentication, mobile and email verification, analysis of GST data, bank statement scrutiny through account aggregators, income tax return verification and credit checks using data from Credit Information Companies. The framework also incorporates fraud checks and other due diligence measures to strengthen risk assessment.
The new approach has significantly eased access to credit for MSMEs. Entrepreneurs can submit loan applications online from anywhere, reducing paperwork and the need for branch visits. The system enables instant in-principle sanctions through a seamless end-to-end digital process, cutting down turnaround time and ensuring credit decisions are based on objective transactional behaviour and credit history. The model is also integrated with credit guarantee schemes such as the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
Loan applications under the digital framework are sourced through the Jan Samarth Portal, which offers an end-to-end journey for MSME loans within bank-defined thresholds. Due diligence is carried out through multiple application programming interfaces (APIs), enabling quicker decision-making and smoother integration with credit guarantee platforms.
The ministry said the initiative marks a major shift in MSME financing, allowing promoters to apply for loans on a 24×7 basis without visiting bank branches or submitting physical documents. Loan decisions are conveyed online immediately after application completion, significantly improving turnaround time and enhancing the overall borrowing experience for MSMEs.
