Govt Digitizes ₹1 Crore MSME Loans via JanSamarth Portal

State-owned lenders are set to adopt a standardized digital process for sanctioning loans up to ₹1 crore, targeting micro and small businesses. The initiative leverages the JanSamarth portal, a platform for government-linked credit schemes, to enable banks to automatically retrieve borrower information such as credit scores and tax data. This integration is expected to significantly speed up loan appraisals and approvals, consequently reducing the rate at which applications are rejected.

This move supports the government's ongoing agenda to bolster MSMEs by making credit more accessible. The focus is on digital lending and employing robust cash-flow-based underwriting models. Banks are already moving towards common application formats for loans under ₹1 crore, and the JanSamarth portal will further allow borrowers to compare offers from various banks, with stages of their applications tracked transparently.

In the fiscal year 2024-25, approximately ₹26.43 lakh crore was disbursed to MSMEs across 13 million accounts. Recent data indicates a substantial increase in the share of incremental credit to MSMEs, rising from 17.7% to 32.5% in the period of January to October 2025, largely driven by public sector banks favoring secured lending and adjustments in MSME classification.