UPSC Prelims Practice Questions — Over 3.96 Lakh MSME loan applications amounting to more than ₹52,300 crore Sanctioned by PSBs under new Credit Assessment Model based on digital credit underwriting programmes between 1st April and 31st December, 2025
Q1. The Credit Assessment Model (CAM) for MSMEs, based on digital-footprint underwriting by Public Sector Banks, is operationalised under which one of the following?
- A. Department of Financial Services, Ministry of Finance
- B. Ministry of Micro, Small and Medium Enterprises
- C. Reserve Bank of India
- D. Small Industries Development Bank of India (SIDBI)
Q2. With reference to the Credit Assessment Model (CAM) as compared with traditional MSME loan appraisal, consider the following statements:
1. Unlike traditional asset- or turnover-based appraisal, the CAM relies on objective digital scoring drawn from GST returns, ITR and bank-statement data.
2. The CAM applies model-based limit assessment to both Existing-to-Bank (ETB) and New-to-Bank (NTB) MSME borrowers.
3. Under the CAM, physical collateral is mandatory for every sanctioned loan, unlike the earlier manual appraisal.
Which of the statements given above is/are correct?
- Unlike traditional asset- or turnover-based appraisal, the CAM relies on objective digital scoring drawn from GST returns, ITR and bank-statement data.
- The CAM applies model-based limit assessment to both Existing-to-Bank (ETB) and New-to-Bank (NTB) MSME borrowers.
- Under the CAM, physical collateral is mandatory for every sanctioned loan, unlike the earlier manual appraisal.
- A. 1 only
- B. 1 and 2 only
- C. 2 and 3 only
- D. 1, 2 and 3
Q3. With reference to the New Credit Assessment Model for MSMEs, consider the following statements:
1. It was announced in the Union Budget 2024-25 and formally launched in March 2025.
2. It was launched exclusively for New-to-Bank borrowers and can never be used for existing borrowers.
3. It is integrated with the Jan Samarth Portal for MSME loan appraisal.
Which of the statements given above is/are correct?
- It was announced in the Union Budget 2024-25 and formally launched in March 2025.
- It was launched exclusively for New-to-Bank borrowers and can never be used for existing borrowers.
- It is integrated with the Jan Samarth Portal for MSME loan appraisal.
- A. 1 only
- B. 1 and 3 only
- C. 2 and 3 only
- D. 1, 2 and 3
Q4. In the context of the New Credit Assessment Model for MSMEs, the term 'digital footprint-based underwriting' is most precisely defined as which one of the following?
- A. Appraisal of loan applications using verifiable digital data such as GST returns, ITR and bank statements fetched in real time, in place of physical asset valuation
- B. Continuous lifetime surveillance of every online transaction a borrower ever makes
- C. Sanction of loans based solely on a borrower's social-media activity and web presence
- D. A credit score assigned only by external credit-rating agencies from digital records
Q5. The over ₹52,300 crore of MSME loans sanctioned under the Credit Assessment Model between April and December 2025 were sanctioned by which one of the following categories of lenders?
- A. Public Sector Banks
- B. Regional Rural Banks
- C. Non-Banking Financial Companies
- D. Small Finance Banks
Q6. Consider the following data sources leveraged by the Credit Assessment Model for appraising MSME loan applications:
1. GST returns
2. Income Tax Returns (ITR)
3. Bank account statements accessed via the Account Aggregator framework
4. Physical property valuation reports
Which of the above is/are correctly identified as data sources used by the model?
- GST returns
- Income Tax Returns (ITR)
- Bank account statements accessed via the Account Aggregator framework
- Physical property valuation reports
- A. 1, 2 and 3
- B. 1 and 4
- C. 2, 3 and 4
- D. 1, 2, 3 and 4
Q7. With reference to the Jan Samarth Portal, consider the following statements:
1. It is a single-window platform for credit-linked Central Government schemes, run by the Department of Financial Services.
2. It covers 15 credit-linked Central Government schemes across sectors such as agriculture, business activity, livelihood and housing.
3. It was launched in 2025 together with the Credit Assessment Model.
Which of the statements given above is/are correct?
- It is a single-window platform for credit-linked Central Government schemes, run by the Department of Financial Services.
- It covers 15 credit-linked Central Government schemes across sectors such as agriculture, business activity, livelihood and housing.
- It was launched in 2025 together with the Credit Assessment Model.
- A. 1 and 2 only
- B. 2 and 3 only
- C. 1 and 3 only
- D. 1, 2 and 3
Q8. The Jan Samarth Portal is best described as which one of the following?
- A. A national single-window digital portal for applying to credit-linked Government-sponsored schemes
- B. A portal exclusively for filing Goods and Services Tax returns of MSMEs
- C. The credit information bureau maintained by the Reserve Bank of India for MSME loans
- D. An electronic platform for online trading and discounting of MSME trade receivables
Q9. The Credit Assessment Model for MSMEs is being implemented across how many Public Sector Banks in India?
Q10. Consider the following MSME credit-support instruments and their descriptions:
1. CGTMSE — a collateral-free credit guarantee scheme for Micro and Small Enterprises
2. Mutual Credit Guarantee Scheme (MCGS-MSME) — provides 60% guarantee coverage via NCGTC for loans up to ₹100 crore for machinery/equipment
3. TReDS — an electronic platform for discounting MSME trade receivables
4. PSB Loans in 59 Minutes — a mutual-fund investment platform for MSMEs
Which of the above is/are correctly identified?
- CGTMSE — a collateral-free credit guarantee scheme for Micro and Small Enterprises
- Mutual Credit Guarantee Scheme (MCGS-MSME) — provides 60% guarantee coverage via NCGTC for loans up to ₹100 crore for machinery/equipment
- TReDS — an electronic platform for discounting MSME trade receivables
- PSB Loans in 59 Minutes — a mutual-fund investment platform for MSMEs
- A. 1, 2 and 3
- B. 1 and 4
- C. 2, 3 and 4
- D. 1, 2, 3 and 4
Q11. Under the MSME classification revised with effect from 1 April 2025, which one of the following categories carries the highest turnover limit for classification?
- A. Micro (up to ₹10 crore turnover)
- B. Small (up to ₹100 crore turnover)
- C. Medium (up to ₹500 crore turnover)
- D. The turnover limit is identical across the three categories
Q12. Among the following contributions attributed to India's MSME sector in recent (2025) Government data, which one is the highest in percentage terms?
- A. Contribution to national GDP
- B. Share in manufacturing output
- C. Share in India's exports
- D. Share in total tax revenue