City
Epaper

FM Sitharaman launches new credit assessment model for MSMEs

By IANS | Updated: March 6, 2025 17:55 IST

Vishakhapatnam, March 6 Finance Minister Nirmala Sitharaman and Minister of State for Finance Pankaj Chaudhary on Thursday launched ...

Open in App

Vishakhapatnam, March 6 Finance Minister Nirmala Sitharaman and Minister of State for Finance Pankaj Chaudhary on Thursday launched the New Credit Assessment Model based on the scoring of digital footprints of MSMEs.

The Finance Minister had announced as part of her Union Budget 2024-25 that public sector banks (PSBs) will build their in-house capability to assess MSMEs for credit, instead of relying on external assessment.

Launched at a post-Budget interaction in Vishakhapatnam, the credit assessment model for MSMEs, based on digital footprints, is expected to be a significant improvement over the traditional assessment of credit eligibility based only on asset or turnover criteria. It will also cover MSMEs without a formal accounting system, according to an official statement.

PSBs will develop a new credit assessment model, based on the scoring of digital footprints of MSMEs in the economy. This credit assessment model will leverage 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 statement said.

The digital footprints used by the model may include name and PAN authentication using NSDL, mobile, and email verification using OTP, API fetch of GST data through service providers, Bank Statement Analysis using account aggregator, ITR upload and verification, API-enabled commercial and consumer bureau fetch and due diligence using CICs, fraud checks, hunter checks through APIs, among others.

The benefits to MSMEs by use of this model include submission of applications from anywhere through online mode, reduced paperwork and branch visits, instant in-principle sanction through digital mode, seamless processing of credit proposals, end-to-end straight-through process (STP), reduced turnaround time (TAT), credit decision based on objective data/transactional behaviour and credit history, no physical collateral securities for loans covered under CGTMSE, among others, the statement added.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

Open in App

Related Stories

International"We call on both parties to maintain composure," Ukraine calls for peace amid Indo-Pak tensions

InternationalSingapore issues travel advisory, urges citizens to avoid non-essential travel to India, Pakistan

InternationalTrump offers 'help' to stop tensions escalate between India and Pakistan

InternationalTrump declares May 8 as 'Victory Day' honouring 80th anniversary of US victory in WW2

International'Hawkish' David Perdue sworn in as US Envoy to China

Business Realted Stories

BusinessReliance Jio added 2.17 mn new mobile users in March out of total 2.93 mn

BusinessCentre launches portal to boost non-ferrous metal recycling ecosystem

BusinessCentre invites expert comments to develop India's Climate Finance Taxonomy for Net Zero goal

BusinessC-DOT, CSIR-NPL sign MoU to boost joint research in classical and quantum communications

BusinessIndia's wireless subscriber base hits 1.16 billion in March, grows 0.28% monthly: TRAI