From Digital Payment to Digital Borrowing: India's Lessons in Financial Inclusion

A little over a decade ago, most Indians did not have a bank account, let alone a digital one. Today, a vegetable vendor in a Tier-2 town scans a QR code as casually as she once counted loose change. The Jan Dhan-Aadhaar-Mobile (the famous JAM Trinity) architecture and UPI did not just digitise payments; they rewrote the global playbook for financial inclusion, and the world has taken note. The question India must now answer is a harder one. Not whether money can move digitally, that is settled. But whether the same trust, ease, and routine can be extended and scaled for borrowing, saving and investing for any household across the country. This is the question the Digital Credit & Inclusion Index (DCII), launched last week seeks to answer. Based on a primary survey across 100 cities in 20 states, DCII is India’s first composite and reproducible measure of how digital credit is accessed, adopted and experienced, rather than merely disbursed.India’s inaugural score of 55.85/100 places it in the “Emerging & Served” band, the second-highest of four, below “Empowered.” The score reflects meaningful progress in expanding awareness and access at scale, while highlighting the next challenge: defining what success should look like in the phase ahead.To Win in the Kingdom of AI, India Must Stop Celebrating Data CentresThe DCII's three pillars do not all point the same way. That gap across the three pillars is the report's central finding. Access, at 61.24, is the strongest pillar: 94 percent of respondents are aware of at least one digital credit method, and the reported barriers that people face are moderate rather than severe. Adoption, at 57.17, shows that entry into the ecosystem is largely solved with only 11.7 percent of respondents having never heard of digital credit. But Impact, the pillar that asks whether any of this has actually changed people's financial lives, lags at 49.16. India has built the rails and got households onto them. It has yet to make borrowing, saving, or investing move through the same rails. This should become a routine aspect of financial operations in the same way which paying has already become. This is the shift in what "success" should mean. Over the last decade, the right measure of progress was reach or access. How many people knew about digital finance, how many had tried it. That job is largely done.The right measure for the next phase is frequency and purpose: how often people borrow, save and invest digitally, and whether that activity is building something, an asset, a cushion, a business, rather than merely bridging a demand gap primarily for consumption financing. UPI’s efforts to simplify and expand digital credit such that it is used as unthinkingly and as often as a UPI payment, for the full range of financial needs, is what the next DCII should be built to detect.Respondents report high confidence in digital platforms for payments. Security scores 77.9 and reliability 75.0. Ask the same respondents about borrowing on the same app, and confidence falls to 52.5, a 17-to-22-point trust deficit sitting on top of otherwise strong infrastructure. This is not an awareness problem; awareness is close to universal. It is a design and disclosure problem: opaque costs, unclear repayment terms and uncertain recourse have not yet earned the confidence the payment experience already commands. Occupation and income tell an equally sharp story: homemakers, gig workers, daily-wage earners and students score roughly 11 points below salaried and business respondents, because informal, undocumented income keeps a large share of the workforce invisible to formal underwriting, the oldest problem in Indian finance, inherited rather than solved by digital lending. Fuel Price Hike: The Rs 3.87 that Could Break India's Middle ClassRegulators should shift the focus from access to routine usage and outcomes. This includes standardised, plain-language disclosure of borrowing costs, repayment terms and grievance redressal in vernacular languages. The Account Aggregator framework should be expanded to GST, income-tax and provident fund data, enabling verified digital transaction histories to serve as credible alternatives to pay slips for gig and informal workers. Regulation should also adopt proportionate, risk-based rules, with lighter documentation and tiered compliance for small-ticket loans. Fintech platforms should voraciously promote the already integrated savings and investments into existing credit and payments journeys. With DCII’s saving-investment linkage score at 51.34, platforms can strengthen financial resilience by making saving and investing as seamless and habitual as borrowing, for instance, through repayment round-ups or linked micro-investment options.Purpose-tagging at the application stage should also become a standard product-design feature to guide users towards appropriate products and financial habits.Banks and NBFCs should recognise Tier-2 India as the current frontier of digital credit inclusion. Tier-2 cities record an average DCII score of 64, compared with 53.1 for Tier-1 cities, signalling strong structural lead. Financial institutions should scale alternative-data underwriting for informal and irregular-income borrowers. They need to develop small-ticket, productive-use credit for up-skilling, promoting entrepreneurship and asset creation, with the same ease of use that has driven consumption-linked credit adoption.How a Free 'Upgrade' Can Hijack Your Calls, Savings Before You Know ItNone of this requires India to build new infrastructure. This already exists within the UPI framework and the related regulatory instruments, the Account Aggregator framework and the Reserve Bank of India's (RBI) Digital Lending Guidelines. What is required is a shift in what each stakeholder measures as progress: not how many people know about digital finance, but how many use it routinely, for borrowing, saving and investing alike, and how much of that utilisation cumulates into a tangible productivity enhancing asset or a safety cushion rather than dissolving into a single instalment payment.As India charts its course toward Viksit Bharat 2047, evidence of this kind should anchor policy rather than trail it. The DCII does not assert India has a financial inclusion problem.It documents something more precise and more useful: a country that has correctly earned its "Emerging & Served" score by solving access, and now needs every ministry, platform and lender pointed at the same target, turning routine borrowing, saving and investing into the next decade's definition of success.India spent ten years teaching itself to pay on a phone. The next chapter is teaching itself to borrow, save and invest on one, and to do it as a matter of routine, not exception.(Rajiv Kumar, is the Chairman, and Abhishek Jha is a Fellow at Pahlé India Foundation. This is an opinion piece and the views expressed are the author's own. The Quint does not endorse or is responsible for them.)

BECOME A MEMBER

India Has Learnt to Pay on Phone, Now it Must Learn to Borrow, Save & Invest

In past decade, the right measure of progress was reach or access. The next phase must focus on frequency & purpose.

Read Latest News and Breaking News at The Quint, browse for more from opinion

Topics: UPI Digital Payments