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AI is changing the way financial inclusion works in India. It is helping lenders look beyond traditional credit scores, understand how people actually earn and spend, and offer financial services to those often left out of the formal system. From first-time borrowers to small businesses, AI is making lending more accessible, personalized, and responsive.
In today’s episode of the Analytics Insight Podcast, host Priya Dialani speaks with Amit Chandel, Co-founder and CTO of Olive, about how AI is changing financial inclusion and digital lending in India.
Amit gives us a peek into how AI and alternative data have enabled fintech platforms to cater to the unbanked segments of people through gig and informal workers, small businesses, and other new borrowers. The assessment of customers' financial behavior in real-time will help the lenders design a loan product which aligns with their earnings cycles.
The podcast also touches upon AI-driven financial coaching, micro-savings, creditworthiness, debt management, and the rise of voice-based regional language interface in finance.
Amit elaborates on why responsible AI is crucial for the financial sector. It encompasses explainability, fairness, human in the loop, customer consent, data management, and model monitoring.
AI is assisting lenders in finding individuals who do not have a traditional credit history or documentation of regular income streams. The lenders are able to gain an insight into what the borrower requires by using alternative data and analyzing real-time financial behavior.
Alternative data is anything that is above and beyond the traditional credit report and account statement. This includes such things asUPI payments, utility bills, income earned from gig work, GST filing information, and POS transaction details among others.
AI enables lenders to create products based on how different individuals earn and consume money. For instance, an individual earning weekly might need weekly payments, while a small-time shop owner who earns money daily might have a better repayment schedule.
Fintech companies should be able to ensure that the decisions made by AI are transparent, and there is still human involvement in the decision-making process. Additionally, there should be proper safeguards regarding bias, consent, data storage, privacy, and accuracy of models.
Not all individuals find it easy to communicate in English when managing their financial services. Voice and regional languages make it easy for individuals to understand loans, payments, and credit information.
