AI-led models likely to unlock up to $170 bn credit gap in India

New Delhi, May 13 AI‑driven credit models could unlock an estimated credit gap worth $130–170 billion in economic value and reduce MSMEs’ reliance on informal lending, the government said on Wednesday, adding that India’s financial‑inclusion push is being reshaped by the convergence of a strong Digital Public Infrastructure and artificial intelligence.

AI models, leveraging consent‑based data sharing and advanced analytics, can strengthen credit assessment and risk management, as well as widen formal lending to MSMEs, informal workers, rural populations and women‑led enterprises, an official statement said.

The statement highlighted the Unified Lending Interface as a key enabler of financial inclusion with nearly 64 lenders including 41 banks and 23 NBFCs onboarded.

AI models use Unified Lending Interface (ULI) to analyse "digital footprints" to assess risk.

ULI is a technology-based initiative to make frictionless credit available to every citizen by enabling digital access to multiple data sources, including authentication services, land records, satellite service, and other financial and non-financial datasets, to support loan processing.

ULI is being expanded to include customers of Regional Rural Banks (RRBs) and District Central Co-operative Banks (DCCBs), enhancing credit access in rural and semi-urban areas.

Account Aggregator (AA) framework, introduced by the Reserve Bank of India as a financial data sharing system complements these developments. The AA system enables consent-based, secure sharing of financial data across institutions, significantly reducing documentation requirements and turnaround time for loan approvals.

Account Aggregators (AAs) are NBFCs that facilitate the retrieval and consolidation of a customer’s financial information. They transfer data from one financial institution to another based on an individual's instruction and consent.

With over 2.6 billion accounts enabled to share data, a total of 252.9 million users have linked their accounts on the AA framework, the statement noted.

Further, the government listed other complementary developments such as JAM convergence with over 144 crore Aadhaar numbers, 58.16 crore Jan Dhan accounts with cumulative deposits of over Rs 3 lakh crore along with rising mobile connectivity, wireless subscribers and 5G coverage.

In February 2026, the Digital India BHASHINI Division (DIBD) and the RBI signed an MoU to collaborate on integrating BHASHINI’s language AI models to enhance multilingual access to banking and financial services.

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