Digital Revolution in MSME Lending: PSBs' Game-Changing Credit Model

Public sector banks have sanctioned over 3.96 lakh MSME loan applications, totaling over Rs 52,300 crore, between April and December 2025. Utilizing a digital Credit Assessment Model, these banks streamline loan processes, leveraging digital data for efficient MSME lending, saving time and reducing paperwork.

Public sector banks have embarked on a digital transformation in MSME lending, sanctioning over 3.96 lakh loan applications worth more than Rs 52,300 crore between April 1 and December 31, 2025, according to the finance ministry's recent revelation.

The introduction of the Credit Assessment Model (CAM), a pivotal initiative launched by PSBs, marks a significant shift in how MSMEs access financial resources. This model utilizes digital footprints to streamline the loan approval process, ensuring objective decision-making and efficient credit limit assessment for both existing and new MSME borrowers.

The CAM effectively authenticates KYC, verifies GST data, analyzes bank statements, and checks credit information, among other functions. This approach not only minimizes paperwork and branch visits but also accelerates loan sanctioning, integrating credit guarantee schemes, substantially benefiting MSMEs.

(With inputs from agencies.)