Nirmala Sitharaman launches new Credit Assessment Model for MSMEs in Visakhapatnam
Union Finance Minister Nirmala Sitharaman launched the new Credit Assessment Model for MSMEs, based on scoring their digital footprints, at a post-Budget interaction in Visakhapatnam on 6 March 2025.
Summary
Union Finance Minister Nirmala Sitharaman and Minister of State for Finance Pankaj Chaudhary launched the new Credit Assessment Model for MSMEs at a post-Budget interaction in Visakhapatnam, Andhra Pradesh, on 6 March 2025. The Union Budget 2024-25 had announced that public sector banks would build in-house capability to assess MSMEs for credit instead of relying on external assessment. The model uses digitally fetched and verifiable data, such as GST data, bank statements through the account aggregator, ITRs and credit bureau records, for automated loan appraisal of both Existing to Bank (ETB) and New to Bank (NTB) borrowers. It will also cover MSMEs without a formal accounting system.
Key facts
- Date and place
- 6 March 2025, Visakhapatnam, Andhra Pradesh
- Launched by
- FM Nirmala Sitharaman and MoS Pankaj Chaudhary
- Announced in
- Union Budget 2024-25
- Developed by
- Public sector banks
- Covers
- Existing to Bank (ETB) and New to Bank (NTB) MSME borrowers
Practice MCQs 3 questions
In which city was the new Credit Assessment Model for MSMEs launched by Nirmala Sitharaman on 6 March 2025?
Show answer
Correct answer: A — Visakhapatnam
The model was launched at a post-Budget interaction in Visakhapatnam, Andhra Pradesh.
The new Credit Assessment Model for MSMEs launched in March 2025 was first announced in which Union Budget?
Show answer
Correct answer: B — Union Budget 2024-25
The Union Budget 2024-25 announced that public sector banks would develop an in-house model to assess MSMEs for credit.
Which of the following is NOT true of the Credit Assessment Model for MSMEs launched in March 2025?
Show answer
Correct answer: C — It was developed by the Reserve Bank of India for private banks
The model was built by public sector banks, as announced in the Budget, not by the RBI. The other three statements are true.