Executive Summary:
The Ministry of Finance addressed concerns about financial inclusion not translating into credit access for poor households in Lok Sabha Unstarred Question No. 2476 on August 4, 2025. The government is committed to deepening financial inclusion, ensuring access to credit, and has implemented various measures and schemes to achieve this. These initiatives include credit schemes, guarantee mechanisms, and leveraging technology for credit assessment.
Key Points / Main Content:
* **Financial Inclusion Commitment:** The Government is committed to ensuring access to basic banking services leads to meaningful participation in the formal financial system, including credit.
* **Pradhan Mantri Jan Dhan Yojana (PMJDY):** Over 55.90 crore accounts have been opened under PMJDY, providing basic savings bank accounts with RuPay debit cards and overdraft facilities.
* **Credit Schemes:**
* **Pradhan Mantri MUDRA Yojana (PMMY):** Provides collateral-free credit up to ₹20 lakh to micro and small enterprises; ₹35.13 lakh crore sanctioned across 53.85 crore loans.
* **Dedicated Schemes:** Stand-Up India (SUPI), PM Street Vendor's AtmaNirbhar Nidhi (PM SVANidhi), PM Vishwakarma, and Prime Minister's Employment Generation Programme (PMEGP) expand credit access for specific groups.
* **Credit Guarantee Mechanisms:**
* Credit Guarantee Fund for Micro Units (CGFMU) and Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) reduce credit risk for lenders.
* **Technology and Alternative Data:**
* **Grameen Credit Score:** Supports credit appraisal of Self-Help Group (SHG) borrowers and rural populations.
* **MSME New Digital Credit Assessment Framework:** Uses integrated data from Income Tax returns, GST filings, and utility payments for faster credit evaluation by Public Sector Banks.
* **Jan Samarth Portal:** A unified digital platform connecting credit seekers with eligible Government schemes.
* **Priority Sector Lending (PSL):** Reserve Bank of India (RBI) mandates PSL targets to ensure credit flows to key sectors.
Impact Analysis:
**Low-Income Households/Poor:**
* *Impact:* Improved access to formal credit, reduced reliance on informal lending sources, and potential for economic empowerment.
* *Action Required:* Utilize available government schemes and digital platforms (e.g., Jan Samarth Portal) to apply for credit and improve creditworthiness through formal financial participation.
**Micro and Small Enterprises (MSEs):**
* *Impact:* Increased availability of collateral-free credit and enhanced access to formal lending, fostering self-employment and income generation.
* *Action Required:* Apply for loans under PMMY and other dedicated schemes, leveraging credit guarantee mechanisms to reduce lender risk.
**Lenders (Banks and Financial Institutions):**
* *Impact:* Reduced credit risk through credit guarantee mechanisms and access to alternative data sources for credit assessment.
* *Action Required:* Utilize the Grameen Credit Score and MSME Digital Credit Assessment Framework, and comply with RBI's Priority Sector Lending targets.
**Self-Help Groups (SHGs) and Rural Populations:**
* *Impact:* Enhanced access to formal credit through improved credit appraisal using the Grameen Credit Score.
* *Action Required:* Improve financial literacy and participate in formal financial activities to build creditworthiness.
Key Entities Referenced
Ministry of Finance: The Indian government ministry responsible for financial matters.
Pradhan Mantri Jan Dhan Yojana (PMJDY): A national mission for financial inclusion to provide access to banking services to all households.
RuPay: An Indian multinational financial services and payment service system.
Pradhan Mantri MUDRA Yojana (PMMY): A scheme to provide collateral-free loans to micro and small enterprises.
Stand-Up India (SUPI): A scheme to promote entrepreneurship among women and Scheduled Castes and Scheduled Tribes.
PM Street Vendor's AtmaNirbhar Nidhi (PM SVANidhi): A micro-credit facility to provide affordable loans to street vendors.
Reserve Bank of India (RBI): India's central bank, which regulates the banking sector.
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE): A scheme to provide credit guarantee support to micro and small enterprises.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION No.2476
ANSWERED ON MONDAY, AUGUST 4, 2025/SRAVANA 13, 1947 (SAKA)
FINANCIAL INCLUSION TO POOR PEOPLE
2476. DR. M P ABDUSSAMAD SAMADANI:
Will the Minister of FINANCE be pleased to state:
(a) whether the Government is aware that the financial inclusion achieved by opening bank accounts has not
translated into credit inclusion for many poor households;
(b) whether there is any plans to assess the creditworthiness of such accountholders using alternative metrics
or data sources and if so, the details thereof;
(c) whether the Government has evaluated the reasons for resorting low-income households with bank
accounts to borrow from moneylenders, chit funds and informal sources;
(d) if so, the details thereof; and
(e) the steps being taken to ensure financial inclusion extends beyond deposit access to meaningful credit
availability?
Answer
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) to (e) The Government is committed to deepening financial inclusion and ensuring that access to basic
banking services leads to meaningful participation in the formal financial system, including access to credit.
The launch of the Pradhan Mantri Jan Dhan Yojana (PMJDY) in August 2014 marked a significant step in
banking the unbanked by facilitating the opening of basic savings bank deposit accounts, with associated
features such as RuPay debit cards and an in-built overdraft facility. As on date, over 55.90 crore accounts
have been opened under PMJDY.
The Government has, inter-alia, undertaken several measures to ensure that credit inclusion complements
deposit inclusion, with a strong focus on funding the unfunded:
(i) The Pradhan Mantri MUDRA Yojana (PMMY) was launched and provides collateral-free credit of up to
₹20 lakh to micro and small enterprises, thereby enabling self-employment and income generation. Since
its inception, 53.85 crore loans amounting to over ₹35.13 lakh crore have been sanctioned under the
scheme.
(ii) Dedicated schemes such as Stand-Up India (SUPI), PM Street Vendor’s AtmaNirbhar Nidhi (PM
SVANidhi), PM Vishwakarma, and the Prime Minister’s Employment Generation Programme (PMEGP)
have been implemented to expand credit access for SC/ST and women entrepreneurs, street vendors,
artisans, and other micro-enterprises.
(iii) Credit Guarantee Mechanisms: Includes the Credit Guarantee Fund for Micro Units (CGFMU) and the
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), which reduce credit risk for
lenders and incentivizes formal lending to underserved segments.
To strengthen credit assessment frameworks for individuals lacking conventional credit history, the
Government is leveraging technology and alternative data sources:
(i) A Grameen Credit Score has been announced to support credit appraisal of Self-Help Group (SHG)
borrowers and rural populations, including farmers and marginalized communities. This initiative is
expected to enhance the quality and objectivity of credit decisions and facilitate improved access to formal
credit in rural areas.
(ii) The MSME New Digital Credit Assessment Framework by Public Sector Banks makes use of integrated
data from Income Tax returns, GST filings, and utility payments to enable faster and more precise credit
evaluation.
(iii) The Jan Samarth Portal, a unified digital platform, has been launched to connect credit seekers with
eligible Government schemes, thereby enhancing transparency, reducing processing time, and improving
outreach.
Further, Reserve Bank of India (RBI) mandates Priority Sector Lending (PSL) targets to ensure that credit
flows to sectors such as agriculture, micro and small enterprises, weaker sections, and other underserved areas
of the economy. Through these concerted efforts, the Government aims to ensure that financial inclusion
evolves from mere access to bank accounts to encompass equitable access to timely and affordable credit,
thereby promoting inclusive growth.
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