SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation, and Infrastructure
Ministry of Finance | Reserve Bank of India (RBI) | National Payment Corporation of India (NPCI)
The Government has recently launched the Credit Assessment Model (CAM) for Micro, Small & Medium Enterprises (MSMEs) to revolutionize loan appraisal by shifting towards a digitally driven, objective decision-making process. This model was announced in the Union Budget 2024-25, with the intent of Public Sector Banks (PSBs) building in-house capability to assess credit based on digital footprints rather than traditional, often subjective, methods.
Key Features of the Credit Assessment Model (CAM):
Digital Data Leverage: The model uses digitally fetched and verifiable data (digital footprints) from the ecosystem, including GST data, ITR verification, bank statement analysis via account aggregators, and PAN authentication using NSDL.
Automated Journeys: It devises automated journeys for MSME loan appraisal using objective decisioning and model-based limit assessment for both Existing to Bank (ETB) and New to Bank (NTB) MSME borrowers.
Reduced Turnaround Time (TAT): Loan decisions are made rapidly, often within a maximum of one day, significantly reducing the time compared to manual methods.
Benefits to MSMEs: MSMEs benefit from online, paperless submission, reduced paperwork and branch visits, and instant in-principle sanctions. The objective assessment reduces subjectivity and error in decision-making.
Related Digital Initiatives: The launch of CAM coincides with the extension of the Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) Scheme to March 31, 2030, which now offers loans up to ₹50,000 in three tranches and includes UPI-linked RuPay Credit Cards with a ₹30,000 credit limit and cashback incentives for digital transactions.
Policy Relevance
The introduction of CAM is a major regulatory step designed to bridge the persistent credit gap faced by MSMEs, particularly those without formal accounting systems. By transforming the credit evaluation process into a fully digital, objective, and transparent system, the government is enhancing financial inclusion and leveraging India’s Digital Public Infrastructure to formalize the MSME sector, thereby accelerating job creation and strengthening India’s manufacturing backbone towards the Viksit Bharat goal.
Relevant Question for Policy Stakeholders: What monitoring mechanisms will the Ministry of Finance implement to ensure the new digital credit assessment models maintain strict data privacy standards under the DPDPA while integrating sensitive financial data (GST, ITR, bank statements) from MSMEs?
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