May 13: Artificial intelligence (AI)-driven lending models could help bridge India’s estimated $170 billion credit gap, according to a recent report, by improving access to formal credit for underserved individuals and small businesses.
The report suggests that AI-based underwriting systems, alternative data analysis, and digital lending platforms can make credit assessment faster, more accurate, and more inclusive, especially for borrowers with limited or no traditional credit history.
It highlights that micro, small, and medium enterprises (MSMEs) stand to benefit the most, as easier access to credit could support business expansion, working capital needs, and overall growth.
Financial experts note that while AI can significantly improve credit penetration, strong regulatory frameworks, data privacy safeguards, and responsible lending practices will be essential to ensure sustainable growth in digital lending.
Overall, the findings point to AI playing a transformative role in expanding financial inclusion and unlocking large-scale credit opportunities across India’s economy.