Government Launches Credit Assessment Model to Boost MSME Lending

New Credit Assessment Model to Transform MSME Lending Landscape

The Government of India has unveiled a technologically advanced Credit Assessment Model (CAM) designed to modernise and standardise loan appraisal for Micro, Small and Medium Enterprises. The new digital-first framework aims to improve transparency, accelerate credit decisions and support the evolving needs of MSMEs, which form the backbone of India’s economic growth.

Automated, Uniform and Data-Backed Credit Evaluation

CAM leverages digitally verifiable information from multiple ecosystem sources to automate loan assessment for both New-to-Bank and Existing-to-Bank borrowers. By reducing subjectivity and manual intervention, the model promotes fairness in credit decisions. Lenders can now determine credit limits more efficiently through model-based evaluation, ensuring faster and more consistent approvals for MSMEs.

Strengthening Digital Payments Infrastructure

Alongside credit reforms, the government, RBI and NPCI continue to expand India’s digital payments ecosystem. Key initiatives include incentives for RuPay debit card usage and low-value BHIM-UPI (P2M) payments, which encourage merchants and customers to adopt cashless transactions. The Payments Infrastructure Development Fund further supports deployment of POS devices and QR codes in rural and underserved areas, promoting deeper financial inclusion.

Enhanced Support Under PM SVANidhi Scheme

The PM SVANidhi programme for urban street vendors has been extended till 31 March 2030, offering long-term financial stability. The revamped scheme allows loans of ₹15,000, ₹25,000 and ₹50,000 across three stages. Beneficiaries also receive a UPI-enabled RuPay credit card with a limit of ₹30,000 and cashback incentives to build digital transaction habits. Jointly implemented by MoHUA and DFS, the scheme continues to expand its reach across urban informal markets.

Exam Oriented Facts

• CAM automates MSME loan appraisal using verifiable digital data.

• Digital payment support includes RuPay, BHIM-UPI incentives and PIDF assistance.

• PM SVANidhi extended to March 2030 with loan slabs of ₹15k, ₹25k and ₹50k .

• UPI-linked RuPay credit card under PM SVANidhi offers a ₹30,000 limit.

Towards Broader Financial Empowerment

Minister of State for Finance Pankaj Chaudhary informed Parliament that these initiatives collectively aim to improve MSME credit access, deepen digital adoption and strengthen financial resilience among low-income entrepreneurs. With CAM and expanded digital tools, the government is advancing its agenda of inclusive and technology-driven financial development.