PSBs Mandated to Standardize Digital MSME Loans via JanSamarth

BANKINGFINANCE

Overview

Government directives require public sector banks to adopt a unified digital process for sanctioning MSME loans up to ₹1 crore, leveraging the JanSamarth portal. This aims to accelerate credit delivery, enhance accessibility, and reduce rejection rates by automating data fetching and loan appraisals. The move supports the government's push to strengthen the vital MSME sector through digitalization.

JanSamarth Portal Integration

Government directives are pushing state-owned lenders toward a unified digital process for sanctioning micro and small enterprise (MSME) loans up to ₹1 crore. This initiative, aimed at accelerating credit delivery, seeks to boost accessibility for this crucial economic sector.

Streamlining MSME Credit Appraisal

The entire lending process will be routed through the JanSamarth portal, a digital platform for government-sponsored credit-linked schemes. This allows banks to automatically pull borrower data, including credit scores from multiple sources, credit information companies, income tax returns, GST data, and bank account details, facilitating a standardized loan appraisal and sanction process.

Sectoral Growth and Trends

In fiscal year 2024-25, lenders disbursed approximately ₹26.43 lakh crore to MSMEs, supporting 13 million accounts. A recent Crisil report noted that incremental credit to MSMEs surged to 32.5% in the January-October 2025 period, up from 17.7% a year prior, driven predominantly by public sector bank (PSB) disbursements. This growth is attributed to banks' preference for secured lending and revised MSME classification criteria.

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