A Game-Changer for Business Loans

The Government’s New Credit Assessment Model Explained

A transformative model to evaluate businesses for loans is here!  Launched in January 2025, this initiative promises faster, fairer, and more accessible credit for MSMEs.

WHY THE NEW MODEL?

‣ Current systems rely heavily on    collateral and historical data.

‣ Many MSMEs are underbanked due to        limited credit visibility.

‣ The government aims to democratize    credit access with advanced tools.

HOW IT WORKS

Step 1:  Banks upload a business’s financial data (e.g., GST filings, IT returns, utility bills).

Step 2:  AI and ML algorithms analyze cash flow, repayment history, and sector trends.

Step 3:  A comprehensive credit score is generated, focusing on potential, not just past records.

FEATURES OF THE MODEL

Sector-Specific Insights: Metrics tailored for industries like manufacturing, retail, and tech.

Real-Time Monitoring: Dynamic risk evaluation through live financial data.

Collaboration Ready: Integrates with existing banking systems for seamless implementation.

BENEFITS FOR MSMEs

No Collateral Needed   Focus on business performance.

Faster Approvals:   Streamlined processes reduce wait       times.

Inclusivity   Brings unorganized sectors into formal   credit frameworks.

what's next?

Launch Date:  Rollout begins in March 2025 for pilot banks.

Nationwide Adoption:  Expected by mid-2025.

Call-to-Action: MSMEs should digitize their financial records to be loan-ready.