Jan Samarth Portal: Finance Ministry cracks down on banks rejecting loans..

The Finance Ministry has had to intervene following a high rejection rate for loan applications on the centralized portal designed to facilitate loans under government schemes. Two individuals familiar with the matter stated that the Ministry has directed public sector banks to integrate the ‘JanSamarth’ portal with their internal loan management systems, expedite the lending process, and address the underlying causes of the 43.2% rejection rate observed in the 2026 fiscal year.

Launched in 2022, the ‘JanSamarth’ portal allows individuals to check their eligibility, apply online, and secure instant digital approval for various government loan schemes. Ministries and departments utilize this portal to monitor the implementation and performance of credit-linked schemes.

A Mint report, citing sources, indicates that the Finance Ministry has identified the primary reasons for application failures; these include incomplete documentation, incorrect information, and applicants deciding not to proceed with the loan process after receiving in-principle approval. These directives were issued by the Department of Financial Services during a review of public sector banks and reflect the central government's efforts to improve conversion rates on the portal.

**Improving Conversion Rates**
The Ministry has instructed banks to regularly update their business rule engines to minimize instances of customers abandoning the process (drop-offs) after receiving digital approval. Additional measures include onboarding all registered branches onto the portal, strengthening customer assistance mechanisms via Business Correspondents (BCs), promoting the platform across bank branches, websites, and mobile apps, and training bank officials on the available schemes. A Mint report citing sources states that integrating JanSamarth with banks' lending management systems will enhance operational efficiency by enabling end-to-end digital lending and reducing the time taken from application to final disbursement.

Another individual added that systematically analyzing the primary reasons for loan rejections is crucial for improving approval rates and the customer experience. In the 2026 fiscal year, approximately 13.1 million loan applications were approved through JanSamarth—more than triple the 4 million approvals recorded in the 2025 fiscal year.

A senior bank official, speaking on condition of anonymity, stated that the main reasons for the rejection of digitally approved loan applications include applicants failing to provide necessary documents, submitting incorrect information or data, and deciding not to avail of the loan despite having applied. Officials believe that addressing these issues could significantly improve the portal's conversion rate.

**Expanded Scope of the Platform**
In February, the government expanded the scope of JanSamarth to include the ‘Credit Guarantee for Micro Enterprises’ (CGTMSE) and the ‘Emergency Credit Line Guarantee Scheme’ (ECLGS) 5.0. Additionally, a new MSME credit assessment model under the Department of Financial Services (DFS) is being integrated, alongside schemes from the state governments of Maharashtra, Rajasthan, Madhya Pradesh, Odisha, Tamil Nadu, Karnataka, and Gujarat.

Currently, 46 government-backed credit-linked schemes are available on JanSamarth. These include the Pradhan Mantri Mudra Yojana (PMMY), PM SVANidhi, Prime Minister's Employment Generation Programme (PMEGP), Kisan Credit Card (KCC), Agriculture Infrastructure Fund (AIF), Deendayal Antyodaya Yojana-National Rural Livelihood Mission (DAY-NRLM), startup loans, rooftop solar installation financing, Fisheries Kisan Credit Card, home loan schemes for EWS/LIG/MIG beneficiaries, the Self-Employment Scheme for Rehabilitation of Manual Scavengers (SRMS), Weaver Mudra Yojana, and the recently added ECLGS 5.0 and micro-credit cards for MSMEs. Experts state that merely reducing processing time will not lower the rejection rate unless the quality of loan applications also improves.

**Quality of Applications**
Loknath Panda, Chief Operating Officer of the technology-based digital service provider BLS E-Services Ltd, stated in a *Mint* report that while reducing the time taken to process loans is essential, improving the quality of applications is equally important. Many applications are rejected due to incomplete documentation or incorrect information rather than ineligibility. This is where Business Correspondents (BCs) can make a significant difference.

Panda further added that by guiding applicants on documentation, verifying information at the source, and raising awareness about government schemes, Business Correspondents can improve application success rates, reduce rejections, and help ‘JanSamarth’ reach more deserving beneficiaries, particularly in rural and semi-urban India.

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