Government Launches Credit Assessment Model to Boost MSME Lending

The government has launched a new Credit Assessment Model (CAM) to make loan approvals for Micro, Small and Medium Enterprises (MSMEs) quicker, clearer, and completely data-driven.

Announced on Tuesday, December 3, the CAM framework uses verified digital data to automate the loan assessment process for MSMEs. It applies clear, model-based rules to review all loan applications and decide credit limits for both existing and new MSME borrowers.

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The information was shared by Minister of State for Finance Pankaj Chaudhary in a written reply to the Rajya Sabha.

The launch comes at a time when the government, the Reserve Bank of India (RBI), and the National Payments Corporation of India (NPCI) are working to further expand and promote digital payments across the country.

Current initiatives include incentive schemes to boost the use of RuPay debit cards and low-value BHIM-UPI (P2M) transactions. The government is also supporting digital payment infrastructure in underserved areas through the Payments Infrastructure Development Fund (PIDF), which helps deploy POS machines and QR codes.

The government has also extended the PM SVANidhi Scheme until March 31, 2030.

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Run by the Ministry of Housing and Urban Affairs and the Department of Financial Services, the scheme gives street vendors collateral-free loans of ₹15,000, ₹25,000, and ₹50,000 in three phases. It also provides a UPI-linked RuPay credit card with a ₹30,000 credit limit and cashback rewards for making digital payments.

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