Public sector banks sanction over ₹52,300 Cr in MSME loans via digital credit model

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Synopsis

India’s public sector banks have approved ₹52,300 crore in MSME loans through the digital credit model, boosting speed, transparency, and inclusion in small business financing.

Summary

Public sector banks (PSBs) in India have sanctioned more than ₹52,300 crore in loans to micro, small, and medium enterprises (MSMEs) using the digital credit infrastructure, according to government data shared in Parliament. The model, aimed at streamlining and accelerating credit access, is part of the broader Digital Public Infrastructure (DPI) initiatives to foster ease of doing business and financial inclusion.

Minister of State for Finance, Bhagwat Karad, shared that the new system enables end-to-end digital loan processing—from application and assessment to disbursement. The digital model reduces manual intervention, minimises paperwork, and uses data-based decisioning for faster approvals. Several banks have already integrated this model, aligning with the Reserve Bank of India’s (RBI) push for tech-driven credit deployment.

This development comes as India focuses on strengthening the MSME sector, which contributes nearly 30% to the country’s GDP and employs over 110 million people. Timely access to credit remains one of the sector’s biggest challenges, especially for smaller enterprises with limited collateral or banking history.

The model supports automated credit appraisal through existing data sources such as GST filings, bank statements, and income tax returns. By making lending decisions more transparent and standardised, the digital credit model is expected to lower operational costs for banks and increase loan accessibility for borrowers.

The government has also highlighted the benefits of this initiative in expanding credit inclusion for women, first-time borrowers, and rural enterprises. The digital credit initiative, while still evolving, is gaining momentum as a transformative force in MSME financing.