Financial Services

Data Explosion and Democratization

Indian has access to numerous sources of granular, current, verified and electronic data. These include both formal sources (GST payouts, financial statements, credit bureau ratings, etc.) and informal sources (e.g., telco, social media, e-commerce, utility data).

Not just this, India has adopted a consent-driven interoperable open-data approach, as embodied in the creation of the IndiaStack, UPI, the Account Aggregator framework, OCEN.

Rich and accessible datasets make India's financial sector ready to lead a credit transformation.

Supportive Policy Ecosystem

India has announced several schemes in the last few years to boost credit access, especially to the MSME sector. These include:

  • Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
  • PSB loans in 59 minutes
  • MUDRA loans






India's retail credit is only 14 percent of GDP (compared to 30 percent in Brazil, and more than 60 percent in China). Three-fifth of MSME credit in India is still sourced from the informal sector.



Lending costs in India are almost 5 percent higher than in peer economies.


The journey to avail credit in India is not MSME friendly: it doesn't leverage transaction-related data for underwriting, has inflexible collateral requirements, and doesn't tailor propositions to needs of small businesses.



India to address

Vision: Transforming credit access and achieving universal financial inclusion

From 14% in 2021 to
Retail Credit to GDP ratio by 2030
From ~55% currently to
Financial Inclusivity
(RBI FI-Index) by 2030


Green Assets share to Lending Portfolio by 2030

From <40% in 2019 to
MSME Formal Credit Lending by 2030
From ~5% in 2019 to

Commercial borrowing cost gap with peer economies by 2047

From ~56% in 2020 to
Credit to GDP Ratio by
From 1 currently to

Indian Banks in Global Top 50 list by Asset Size by 2047

From ~USD 200 Bn in 2021 to
3.1-3.5 Tn
Banking contribution to GDP
by 2047

Priority Unlocks

What India Inc could do now

Leverage the AA framework to transform credit bureaus

India's credit bureaus and public credit registry (currently under consideration) could leverage the Account Aggregator framework to become comprehensive consent-driven information bodies.

This in conjunction with open credit enablement network (OCEN) will enable them to identify early delinquency signals, provide (near) real-time credit insights, and release more dynamic and richer credit ratings and scores.

Key actors: Credit bureaus and public credit registry

Launch a centralized awareness program

India could launch a centrally coordinated program to create awareness about responsible lending practices, fraud, cybercrimes, credit scores, lending risks, etc. This will give more Indians confidence to participate in the formal sector and boost availability of credit.

This program could be structured and financed like the SEBI initiative to educate investors about mutual funds.

Key actors: Banking sector, potentially under the Indian Banks' Association

Build ecosystems around underserved segments

Credit access to underserved segments (such as MSME B2B commerce, rural agriculture, logistics, and healthcare) could be expanded through targeted ecosystems.

These ecosystems could encompass PPPs to establish critical ecosystem infrastructure (such as marketplaces, transaction platforms, and data platforms), policies to drive mass adoption of critical use cases, and tailored and seamlessly integrated credit products.

Key actors: Financial and public institutions

Share collections infrastructure

Lenders could partner with regulators to create inter-operable collections protocols. These protocols could enable them to share collections capacity and drive more efficient utilization of installed collections infrastructure especially in underserved regions.

Key actors: Lenders, in partnership with regulatory bodies

Tokenize collateral assets

India could incubate centralized, blockchain-based, asset-specific utilities to digitalize both physical collateral (homes, vehicles, gold, etc.) and financial assets (invoices, securities, etc.).

This would enable digital verification, lien-marking, trading, and securitization of all asset categories.

Key actors: Industry bodies, with regulatory support from RBI

Enrich fraud registries

Private lenders could leverage an expanded AA framework to enrich fraud registries with additional non-financial data sources (e.g., bill payments and online purchases). This could enable creation of sharper fraud signals (based on behavioral patterns) and more accurate and dynamic probabilistic fraud scores.

Key actors: Private lenders

How policymakers could help

Expand Account Aggregator network

The Account Aggregator framework could be expanded to include beyond-banking information (including from government services such as IT, GST, PF, etc.), utilities data (electricity, telco, gas, water, etc.), and other information (warehouse receipts, e-way bills, crop information, etc.). This expansion should be based on consent-based architecture, for both information collection and dissemination.

Key actors: RBI, with support from entities regulated by SEBI, IRDAI, etc.

Fast-track NPA resolution

India could expedite the NPA resolution process further by implementing e-court management systems, enabling e-bidding of bankrupt assets, expanding the Pre-packaged Insolvency Resolution Process (abbreviated as PRIRP) beyond MSMEs, and packaging pre-approvals from regulatory authorities along with the resolved asset.

Key actors: Ministry of Finance

Create a digital currency

India could create a digital currency with clearly defined standards for institutions across systems, protocols, and core infrastructure.

Doing so could improve credit penetration across both the retail and MSME segments, offer better visibility of MSME cashflows to institutions, allow real-time cross-border remittances, and expand trade finance offerings through international collaborations.

Key actors: RBI

Initiative by
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