Government launches New Credit Assessment Model for MSMEs

In a Post Budget interaction at Vishakhapatnam today, the Union Finance and Corporate Affairs Minister, Nirmala Sitharaman and Minister of State, Finance Pankaj Chaudhary launched the New Credit Assessment Model based on the scoring of digital footprints of MSMEs. It was announced in the 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. 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.