Grameen Credit Score framework likely to be launched in next 3 months

The Union government is expected to roll out the Grameen Credit Score (GCS) framework within the next three months, a senior government official said.

 

Announced by Finance Minister Nirmala Sitharaman in the Union Budget 2025–26, the initiative is designed to strengthen financial inclusion in rural India, with a particular focus on members of self-help groups (SHGs).

 

“A committee has already been formed to oversee the development and implementation of the Grameen Credit Score framework. The government is currently awaiting approval from the Reserve Bank of India (RBI) before moving forward with the rollout and is expected to go live in the next three months,” the official said.

 

The GCS is expected to serve as a supplementary tool to existing credit bureaus, allowing banks, microfinance institutions, and other lenders to better evaluate the creditworthiness of rural borrowers. 

 

“The current credit scoring mechanism of Credit Information Companies (CICs) is, by design, generic to all individual borrowers with no specific consideration for the rural sector. A Grameen Credit Score tailored for the credit assessment purpose of rural and SHG borrowers would facilitate better credit assessment of rural borrowers, thereby improving their access to formal credit. The government is working out the modalities and the contours of the Grameen Credit Score framework in consultation with the concerned stakeholders,” Minister of State for Rural Development Dr Chandra Sekhar Pemmasani had informed the Rajya Sabha in a written reply. 

 

At present, private sector and small finance banks typically verify a borrower’s credit history through agencies like CRIF Highmark and Cibil, which maintain records of past loans, repayment behaviour, and defaults, if any. A good score from these bureaus indicates that the borrower is likely to repay on time.

 

The Grameen Credit Score holds particular importance in the context of the ongoing distribution of property cards under the Centre’s Survey of Villages and Mapping with Improvised Technology in Village Areas (SVAMITVA) scheme, which is expected to boost credit demand in rural regions. On January 18, Prime Minister Narendra Modi had highlighted the economic potential of the initiative, stating that once these cards are issued across all villages in the country, they could help generate economic activity worth over Rs 100 trillion. 

 

“There are more than 6 lakh villages in our country. Nearly half of these villages have been surveyed by drones. After getting legal documents, lakhs of people have taken loans from banks on the basis of their houses and property,” PM Modi said.

 

The SVAMITVA scheme is a government initiative launched in 2020 to provide rural residents with official ownership records of residential land. Implemented by the Ministry of Panchayati Raj, the scheme uses drone technology to map land parcels in over 6 lakh villages, enabling the issuance of property cards. These cards serve as legal proof of ownership and help unlock the economic potential of rural land by allowing property owners to access formal credit from banks. SVAMITVA aims to enhance transparency, reduce land disputes, and spur development in rural India. 

Serving credit needs

• Grameen Credit Score designed to strengthen financial inclusion in rural India
• Initiative particularly focuses on members of self-help groups
• It is expected to serve as a supplementary tool to existing credit bureaus
• Government currently awaiting RBI approval before moving forward with rollout