2017 ICT4D Conference

There is a huge unmet credit need (~$400billion+ per year), particularly in the low income segments in India. Our recent work shows that 3 in 5 Indians borrow using informal means.



Traditional lenders are structurally constrained from fulfilling this need: Inability to lend without collateral, high cost of lending, outmoded underwriting, limited product innovation, are some key reasons.



Macro factors and ecosystem drivers have substantially fueled growth of the inclusive digital lending industry.



As a result three models seem to be emerging – Digital Data Credit Scored Lending, Invoice Discounting, Peer to Peer Lending.



Our work on pilots built on the India stack showed that inclusive digital lending has large potential to scale. We noted positive consumer experience, potential to serve a new segment of low income demographics and lower costs of lending.



However, there are risks in inclusive digital lending that need to be addressed, such as over-lending, suitability of product offerings, and data protection/consent



Change makers can explore a number of opportunities to help realise the potential of responsible inclusive lending such as creating shared standards and practices, enhancing consumer readiness and fostering responsible growth.