India’s digital credit push: PSBs sanction ₹52,300 crore for MSMEs using advanced underwriting

New Delhi: Public Sector Banks (PSBs) sanctioned more than 3.96 lakh loan applications for Micro, Small and Medium Enterprises (MSMEs), amounting to over ₹52,300 crore, between April 1 and December 31, 2025, under digital credit underwriting programmes, the government said on Monday.

The PSBs launched a Credit Assessment Model (CAM) last year, using digital footprints to streamline and automate MSME loan appraisal and approval processes.

According to the Ministry of Finance, the model leverages digitally fetched and verifiable data to enable automated loan journeys, objective decision-making and model-based credit limits for both Existing to Bank (ETB) and New to Bank (NTB) MSME borrowers.

The system uses digital footprints for KYC authentication, mobile and email verification, GST data analysis, bank statement assessment through account aggregators, income tax return verification, credit bureau checks and fraud screening, among other processes.

The ministry said the digital lending framework offers multiple benefits to MSMEs, including online loan applications from anywhere, reduced paperwork and branch visits, instant digital sanctions, seamless end-to-end processing, shorter turnaround time, and data-driven credit decisions based on transaction behaviour and credit history. It also integrates credit guarantee schemes such as the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

“Borrowers need not visit bank branches to apply for loans. MSME promoters can apply anytime, anywhere through digital platforms. Required documents can be uploaded online, with no need to submit physical copies during loan approval,” the ministry said.

Meanwhile, in a move to strengthen India’s e-commerce and MSME export ecosystem, the government last week extended export incentives to postal shipments, effective January 15.

The Central Board of Indirect Taxes and Customs (CBIC) announced that benefits under the Duty Drawback, Remission of Duties and Taxes on Exported Products (RoDTEP) and Rebate of State and Central Taxes and Levies (RoSCTL) schemes will now apply to exports made through the postal route in electronic form.

These incentives are expected to boost the competitiveness of MSME exporters, particularly from smaller towns and remote areas, and provide a major push to postal exports, the Finance Ministry said.

IANS