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India's Digital Revolution: How DPI Unlocks Credit for 450 Million Borrowers

India's Digital Public Infrastructure is revolutionizing how credit reaches millions of underserved borrowers. The system has dramatically reduced onboarding costs while scaling up digital lending operations nationwide. With Aadhaar-based e-KYC processing 39 crore transactions monthly, the infrastructure supports massive financial inclusion. This transformation positions India's DPI as a global model for accessible, efficient credit systems.

Key Points: India's DPI to Provide Credit Access for 450 Million Borrowers

  • Aadhaar-based onboarding reduced costs from $23 to just $0.5 per customer
  • Fintech NBFCs account for 74% of personal loan volumes in FY 2024-25
  • UPI enables over 151 million debt collections every month nationwide
  • Account Aggregator framework has helped underwrite more than 189 lakh loans
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India's DPI can unlock credit for the next 450 million borrowers

India's Digital Public Infrastructure including Aadhaar and UPI can transform credit access for 450 million untapped borrowers through paperless, app-first lending solutions.

"India's DPI turned smartphones into a credit gateway, bringing millions of underserved customers into formal credit - Sugandh Saxena, FACE CEO"

New Delhi, Oct 27

India’s Digital Public Infrastructure (DPI) including Aadhaar, Unified Lending Interface (ULI) and Unified Payments Interface (UPI) should be leveraged to provide credit access to 450 million untapped borrowers, a report said on Monday.

India's DPI played a key role in transforming onboarding, underwriting, and collections of the lending process through consent-driven, paperless, app-first lending nationwide, said the report from RBI-recognised self-regulatory organisation in the fintech sector, the Fintech Association for Consumer Empowerment (FACE).

According to the report, in collaboration with D91 Labs by Setu, fintech NBFCs account for 74 per cent of personal loan volumes in FY 2024-25, and Aadhaar-based onboarding alone is now at a massive scale, with over 39 crore e-KYC transactions processed every month.

The report mentioned that Aadhaar-based e-KYC, DigiLocker, and eSign reduced onboarding costs from $23 to $0.5, the Account Aggregator framework has helped underwrite over 189 lakh loans, and UPI enables more than 151 million debt collections every month.

It highlighted the need for deeper collaboration between regulators, financial institutions, and innovators to ensure sustainable adoption.

“India’s DPI turned smartphones into a credit gateway, bringing millions of underserved customers and unmet credit needs into formal credit. By embedding frictionless onboarding, transactions, and real-time data sharing into the lending process, DPI is making digital lending the default choice, making access to formal credit easier and faster," said Sugandh Saxena, CEO of FACE.

"The continued growth and market needs will require further innovations and enhancements in DPIs, including leveraging Aadhaar, UPI, ULI, and CBDC to deliver convenient, safe, and purpose-built credit to 450 million untapped borrowers,” he added.

Regarding frictionless repayments, FACE noted that from over 491 million UPI users, collections and EMI payments average Rs 77,000 crore monthly via UPI and Rs 15,521 crore monthly via BBPS.

- IANS

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Reader Comments

R
Rohit P
The cost reduction from $23 to $0.5 is mind-blowing! This is exactly what India needs - technology making financial services affordable for everyone. Hope this reaches rural areas soon.
A
Arjun K
While the progress is impressive, we need stronger data protection laws. With so much personal data flowing through these systems, security should be the top priority. Hope RBI is monitoring this closely.
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Sarah B
As someone who moved to India recently, I'm amazed by the digital infrastructure here. Back home, we still carry multiple documents for banking. India is showing the world how digital transformation should be done!
V
Vikram M
450 million borrowers is a huge number! This could transform small businesses across India. My chai shop in Pune got a working capital loan through UPI-based lending app last month. No bank visits, no agents - just pure digital convenience. Jai Hind!
K
Kavya N
The numbers speak for themselves - 39 crore e-KYC transactions monthly shows the massive scale India is operating at. This is digital empowerment at its best. Proud to see India leading in fintech innovation! 💪

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