New Delhi, Jan 19 (.) Public Sector Banks (PSBs) have sanctioned loans worth more than Rs 52,300 crore to nearly 3.96 lakh Micro, Small and Medium Enterprises (MSMEs) during the period from April 1 to December 31, 2025, under the newly introduced digital credit assessment model, an official statement said on Monday here.
The digital model marks a major shift in the way MSME loans are processed, replacing traditional manual evaluation with a technology-driven system that relies on verified digital data.
The initiative aims to improve speed, transparency and reach of credit delivery to small businesses across the country.
Under this framework, banks assess loan applications using digital footprints such as GST filings, income tax data, bank transaction history and credit bureau information.
This has significantly reduced paperwork and shortened turnaround time, enabling faster in-principle approvals and quicker disbursal of funds.
The digital credit model allows MSMEs to apply for loans through an end-to-end online process, eliminating the need for repeated branch visits.
It also supports both existing borrowers and new-to-bank enterprises, helping first-time borrowers gain easier access to formal credit channels.
A key feature of the model is its linkage with government-backed credit guarantee mechanisms, which reduces lending risk for banks and encourages higher loan sanctions to small and micro enterprises.
This has helped widen credit penetration, especially among smaller businesses that often face challenges in meeting conventional collateral requirements.
MSMEs play a crucial role in employment generation, exports and overall economic growth. Improved access to timely and affordable finance is expected to strengthen business expansion, technology adoption and capacity building in the sector.
The strong loan sanction numbers achieved within a short period indicate growing acceptance of digital lending frameworks within the public banking system.
. SAS PRS