New Delhi: Public sector banks (PSBs) have sanctioned more than ₹52,300 crore in loans to micro, small and medium enterprises (MSMEs) through a new digital credit assessment framework, underscoring the Centre’s push to improve access to formal finance for small businesses. The sanctions, covering over 3.96 lakh loan applications, were made between April 1 and December 31, 2025, the finance ministry said on Sunday.
The Credit Assessment Model (CAM), rolled out in 2025, relies on borrowers’ digital footprints to automate loan appraisal and decision-making for both existing-to-bank and new-to-bank MSME customers. The system uses verifiable digital data such as GST filings, income tax returns, bank statements accessed through account aggregators, credit bureau information and fraud checks to arrive at objective credit decisions.
According to the ministry, the model enables instant in-principle sanctions, significantly reduces turnaround time and allows end-to-end straight-through processing with minimal manual intervention. Loan applications are sourced through the government’s Jan Samarth portal, which integrates multiple lenders and credit guarantee schemes, including the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
For MSMEs, the shift to digital underwriting has translated into fewer branch visits, lower paperwork and the ability to apply for loans online round the clock. Decisions are communicated digitally upon completion of the application process, improving predictability and speed of credit delivery.
The government sees digital footprint-based lending as a key lever to deepen formal credit penetration among small enterprises, particularly those with limited collateral but established transaction histories, officials said.