Centre to roll out credit rating for rural borrowers

The government is working with public-sector banks and the IBA to develop the framework

- Subhash Narayan & Rhik Kundu

The Union government plans to launch a Grameen Credit Score system within six months, mirroring the MSME credit framework, to boost formal lending to farmers, self-employed individuals, and self-help groups (SHGs), two people familiar with the matter told Mint.

The government is working with public-sector banks and the Indian Banks' Association (IBA) to develop the framework. It will assess rural borrowers' creditworthiness based on digital transaction data, government subsidy receipts, and Unified Payments Interface (UPI) activity, the people mentioned above said.

Like the Micro, Small and Medium Enterprises MSME model, the rural credit score will incorporate alternative financial indicators, such as utility bill payments, property ownership, and vehicle usage, the first person mentioned above said.

"The two models—the MSME credit assessment and the Grameen Credit Score—are being developed in parallel," the person said. "The MSME framework will be implemented first, while the rural credit score should be ready for deployment in the latter half of 2025."