Bank of Baroda launches ‘bob Digi Udyam’ – A Digital Financing Scheme for MSMEs.

Introduction

Bob Digi Udyam:Bank of Baroda (BoB), one of India’s leading public sector banks, has launched ‘bob Digi Udyam’, a digital financing scheme for Micro and Small Enterprises (MSEs). This initiative aligns with the government’s vision of Digital India and Viksit Bharat @2047, ensuring faster, transparent, and collateral-free credit access to India’s MSME sector.

Key Features of ‘bob Digi Udyam’

• Target Segment: Micro and Small Enterprises (MSEs)
• Loan Amount: ₹10 lakh to ₹50 lakh
• Collateral Requirement: None – backed by Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
• Loan Type: Working capital via Cash Credit & Overdraft facilities
• Loan Tenure: 12 months

Digital Lending Process

• Fully Digital Portal: Entrepreneurs can apply online using their digital footprints.
• Automated Risk Assessment: An AI-driven risk scorecard processes applications instantly.
• Sanction Speed: Provisional sanction letters are issued within minutes.
• Processing System: Final approvals handled via TEJAS, BoB’s MSME loan origination and processing platform.
• Modes of Application:
  • DIY Mode – complete application online independently
  • Assisted Mode – through Bank of Baroda branches

Policy Significance

• Supports the Union Budget 2024–25 push for in-house credit assessment models in public sector banks.
• Enhances financial inclusion by extending easy credit to small businesses.
• Boosts digital transformation of MSME lending, reducing dependence on paperwork.

Relevance for UPSC

• Prelims: Key facts on MSME schemes, digital financing, CGTMSE, TEJAS system.
• GS Paper II: Governance & service delivery through digital platforms.
• GS Paper III: Role of MSMEs in economic growth and financial sector reforms.
• Essay/Ethics: Use of AI and automation in governance, transparency in lending.

Possible UPSC Prelims Question

Q. The ‘bob Digi Udyam’ initiative recently launched by Bank of Baroda is related to:
(a) Agricultural subsidies
(b) Digital financing for MSMEs
(c) Rural electrification
(d) Student loans

Answer: (b) Digital financing for MSMEs

Conclusion

The launch of ‘bob Digi Udyam’ marks a major step in India’s digital banking revolution, aimed at empowering MSEs with quick, collateral-free, and transparent financing. By leveraging AI-driven risk assessments and a seamless digital platform, Bank of Baroda is setting the stage for the future of MSME credit in India.