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Public Banks Sanction ₹52,300 Crore in MSME Loans via New Digital Model

Public sector banks have sanctioned a massive volume of MSME loans using a new digital credit assessment model launched by the government. The model shifts from collateral-based lending to using verifiable digital data like GST filings and bank statements for automated appraisal. It allows entrepreneurs to apply online anytime, receive instant in-principle sanctions, and eliminates the need for physical document submission. This initiative, channeled through the Jan Samarth Portal, aims to drastically speed up and transparently increase credit flow to the vital MSME sector.

Key Points: PSBs Sanction Over ₹52,300 Cr MSME Loans via Digital Model

  • Sanctioned over 3.96 lakh loans
  • Total value exceeds ₹52,300 crore
  • Uses digital data like GST & bank statements
  • Enables 24/7 online application & instant sanction
2 min read

Public sector banks sanction over Rs 52,300 crore in MSME loans via new assessment model

Public sector banks sanctioned over 3.96 lakh MSME loans worth ₹52,300+ crore using a new digital credit assessment model from Apr-Dec 2025.

"This credit assessment model leverages the digitally fetched and verifiable data available in the ecosystem - Ministry of Finance"

New Delhi, January 19

Small business financing in India has undergone a massive digital transformation, with Public Sector Banks sanctioning more than 3.96 lakh MSME loan applications between April 1 and December 31, 2025. These sanctions, totalling over Rs 52,300 crore, were made possible through the newly launched Credit Assessment Model.

This model, which leverages digital credit underwriting, represents a shift from traditional collateral-based lending to a system fueled by verifiable data and real-time digital footprints.

According to the press release bythe Ministry of Finance, "This credit assessment model leverages the digitally fetched and verifiable data available in the ecosystem and devise automated journeys for MSME Loan appraisal using objective decisioning for all loan applications and model-based limit assessment for both Existing to Bank (ETB) as well as New to Bank (NTB) MSME borrowers."

The "digital footprints" analysed by the model include comprehensive data points such as GST data analysis, bank statement analysis using account aggregators, and ITR verification. The system also conducts "KYC authentications, mobile and email verifications, and due diligence using Credit Information Companies (CICs) data."

This multi-layered verification process is integrated with fraud checks to ensure the security and integrity of the lending process, while also facilitating "integration of credit guarantee schemes like CGTMSE" to provide further support to small enterprises.

For MSME promoters, the benefits are practical and immediate. The model enables the "submission of application from anywhere through online mode," effectively removing the necessity for physical branch visits. Key features of this revolution include "instant in-principle sanctions" and an "end-to-end straight through process (STP)" that significantly reduces the turnaround time (TAT). As the decision is conveyed online immediately upon completion of the application, business owners gain the flexibility to apply on a "24/365 basis."

The sourcing of these applications is centralised through the Jan Samarth Portal, where advanced APIs perform due diligence using digitally sourced data. According to the release, this digital-first approach ensures "seamless processing of credit proposals" and offers a "credit decision based on objective data." By eliminating the need to submit physical copies of documents, the new model has set a high standard for ease of doing business, ensuring that credit flows to the MSME sector faster and more transparently than ever before.

- ANI

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Reader Comments

A
Arjun K
Rs 52,300 crore is a huge number! The move from collateral to data is the real story here. Many small businesses have good cash flow but no property to mortgage. Using digital footprints like GST returns is a much fairer way to assess creditworthiness. Kudos to the finance ministry.
R
Rohit P
I have a respectful criticism. While the model sounds great, the real test is in tier-2 and tier-3 cities. Will the bank staff be properly trained? And what about MSMEs that are still largely cash-based and their digital footprint is weak? The system must be inclusive.
S
Sarah B
Integrating with CGTMSE is a smart move. The credit guarantee was always there, but the process to avail it was slow. If this model automates that too, it significantly de-risks loans for banks and should lead to even more lending. Good policy design.
V
Vikram M
The key is "instant in-principle sanctions". For a small business owner, waiting weeks for a loan decision while bills pile up is the worst part. If this reduces TAT as promised, it will boost working capital management immensely. Jai Hind! 🇮🇳
K
Kavya N
Hope the data privacy and security is rock solid. Sharing GST, bank statements, and ITR data through APIs is convenient but also a risk. The article mentions fraud checks, which is reassuring. Overall, a very positive step for ease of doing business.

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