The Indian economy is plagued by an acute credit gap, with a credit-to-GDP ratio of 50% compared to China’s 177%. This gap is particularly pronounced for micro, small, and medium enterprises (MSME) and nano-SME borrowers, who struggle to access credit due to high operational costs and difficulties in underwriting. However, Artificial Intelligence (AI) and machine learning (ML) can revolutionize credit provision and decision-making, especially for these underserved segments. By leveraging AI models, lenders can assess creditworthiness, detect fraud, identify early warning signs, and improve operational efficiency. The applications of AI/ML in credit provision are vast, from credit decisioning to collections, and can help bridge the credit gap. In India, AI-driven credit provision can be particularly impactful for women borrowers and rural and semi-urban borrowers, who often lack traditional underwriting data. By harnessing the power of AI/ML, India can unlock economic growth and financial inclusion.
AI-Driven Credit Provision – Bridging India’s Acute Credit Gap
AI models offer a versatile toolkit for various stages of the customer lifecycle within financial institutions.
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