Challenging Outdated Credit Models in India

The "Invisible Hand" is getting an upgrade and it’s algorithmic. 🤖📈 Traditional banking is often slow, manual, and human-heavy. In a market as dynamic as India's micro-lending sector, these "friction points" aren't just inefficiencies, they are barriers to financial inclusion. I’ve been diving into the concept of Agentic AI —the shift from systems that just suggest actions to systems that actually execute them. In the context of micro-lending, this is a total game-changer. Unlike traditional AI, these "Agents" can: 👉 Handle complex workflows: Managing "If-This-Then-That" exceptions in lending without manual intervention. 👉 Scale risk management: Identifying creditworthiness through alternative data patterns to bridge the "Identity Gap." 👉 Enable Judgment at Scale: Replacing manual bottlenecks with autonomous agents that handle compliance and fraud in real-time. This article beautifully explains how Agentic AI could reshape India’s micro-lending ecosystem by making underwriting smarter, collections more proactive, operations more efficient, and financial inclusion more scalable. What stood out to me is this shift:From manual, fragmented workflows ➝ to intelligent, self-correcting systems. Check out this compelling deep dive on the shift in comments. Worth a read for anyone in banking, fintech, credit risk, operations or digital transformation. #FinTech #AgenticAI #BankingInnovation #FinancialInclusion #India #FutureOfFinance #DigitalIndia

India built the world’s most powerful digital payments rail — #UPI However credit underwriting hasn’t evolved at the same pace. A large part of financial behaviour now sits hidden in UPI trails, rich in signal, poor in interpretation. #SignalIQ from Pine Labs built with Setu aims to change that, turning everyday transaction data into real-time, usable credit intelligence. • UPI changed how India pays… • Intelligence on top of these rails will define how India lends… Know more: https://lnkd.in/dEw_Cgev #Fintech #UPI #CreditOnUPI #AI #Underwriting

Been thinking a lot about how Agentic AI will change lending—not just optimize it, but fundamentally reshape access to credit. In India’s micro-lending ecosystem, this could be a step-change moment. Put together some perspectives here https://lnkd.in/gg4RDGPv

Most AI startups pitching to banks are getting one thing wrong. The Reserve Bank of India (RBI) has made accountability pretty clear -if something goes wrong, the bank is 100% accountable and it can’t blame the AI model or the vendor. That changes how these products are being evaluated. Earlier the question was: “Does it improve recovery rates/ help us save costs?” Now it’s more like: 1. Why did the system take this action? 2. Can we step in when needed? 3. Can we explain anomalies if a customer complains? 4. Will this lead to penalties/ reputational damage? Especially in areas like collections or voice AI, this stuff isn’t theoretical. Tone, timing, escalation, it all matters. Which is why fully “autonomous” pitches are starting to feel off and there might be more than one indemnity clause inserted ‘just in case’. But the bigger issue to tackle is that banks will naturally now want winning products that may not be the most “autonomous” but are perhaps the most auditable, controllable, and compliant. Which brings us to the elephant in the room: replacing humans with AI in regulated industries. There’s going to be now less of “replace the human” and more of “support the human, with guardrails, so our throughput is better in terms of both quality and quantity”. In other words: AI in fintech is shifting from automation-first to accountability-first; while it feels like a subtle shift, it’s not. Voice startups might benefit more by partnering with BPOs than banks directly. Tomorrow’s winning teams will know the difference between a cool demo and something a bank will actually deploy. Think about it! #Fintech #AI #Banking #Startups #RBI #VoiceAI

"In India, the true value of #AI in #finance should be judged by three tests. i. Does it advance #inclusion? ii. Does it improve #efficiency? iii. Does it strengthen #trust? If it does these three things positively, then it serves a meaningful public purpose. If it does not, then its sophistication alone should not impress us." This is how Shri Swaminathan J, Deputy Governor, Reserve Bank of India, believes AI should be used in finance. According to him: "If India can combine its digital strengths, entrepreneurial energy, scientific talent and institutional wisdom, then we can build a financial sector that is not only more efficient, but also more inclusive, more resilient and more trustworthy. That should be our aspiration. We should not pursue technology for its own sake, but rather use it in the service of people. Intelligence without accountability does no good; it must be guided by sound and ethical judgment. Our endeavour, therefore, should be to foster innovation that strengthens institutions for the long term." This is a pertinent point made at XX CUB Shri V. Narayanan Memorial Lecture, delivered by Shri Swaminathan J, Deputy Governor, Reserve Bank of India, on Saturday, April 11, 2026, at the SASTRA University, Thanjavur. Here is the full lecture covered in the Reserve Bank of India (RBI) Bulletin. Worth reading the text: https://lnkd.in/ggQxFM8k

When it comes to AI the 2 important nations are moving on different trajectory, The AI in Finance is creating vastly different futures in the US vs. India. It’s a tale of two digital paths. In the US, AI is shifting from automation to augmentation. Financial institutions are utilizing sophisticated LLMs to reshape asset management, enhance market analysis, and automate complex fraud detection with real-time granularity. The focus is hyper-personalization, advanced capabilities, and regulatory resilience for established structures. Contrast that with India, where AI is a powerful force for democratization. Driven by world-leading digital public infrastructure (like UPI), India's focus is financial inclusion. We are seeing rapid deployment of AI in alternative credit scoring to serve the unbanked, vernacular AI assistants for massive reach, and hyper-local lending. Innovation is fast, digital-first, and focused on mass market penetration. One is building depth and complexity; the other prioritizing scale and accessibility. What trends are you seeing on the ground? Share your insights. #FinanceAI #USvsIndia #FinTech #ArtificialIntelligence #DigitalTransformation #Innovation #FutureOfFinance #slide #MSword #softskills #ppt

#Building a future-ready financial ecosystem!# I recently attended the workshop on *AI Applications in Banking Operations* at the Gokhale Institute of Politics and Economics. The sessions offered a deep dive into how AI is set to redefine Indian banking. Here are my top 3 takeaways: #Scaling with India’s DPI: AI is the key to unlocking the full potential of India’s Digital Public Infrastructure, driving faster balance sheet growth through smarter credit and risk intelligence. #Regulatory Evolution: Insightful discussions on how the RBI is navigating AI adoption, bridging regulatory gaps, and aligning with global standards to ensure a resilient financial system. #Operational Transformation: From bridging the MSME credit gap to real-time fraud detection and automated reconciliation, AI is moving from a "nice-to-have" to the core of banking operations. The road to Viksit Bharat is paved with data and intelligent algorithms. Exciting times ahead for #FinTech! We at SIDBI(Small Industries Development Bank of India) have already been early movers and at forefront of AI adoption in MSME credit journey and are able to scale up the business by multiples. #AI #FinTech #BankingInnovation #DigitalIndia #RBI #ViksitBharat

A 12-year-old with a debit card is more financially capable than any AI agent on the planet. I went on camera to explain why. Just did a 40-minute interview with Sudhi Sachdev on Front Page by AIM Network. Showed a live demo of one AI agent paying another. Real money. Real settlement. No human in the loop. The question I kept getting: which parts of the financial system break for non-human entities? All of it. PAN card? Can't. Video KYC? Can't. Bank account? Can't. The entire financial system assumes the thing spending money has a pulse. Remove that assumption and everything falls apart. That's what MoltPe fixes. We give AI agents their own wallets, spending limits, and the ability to earn money. Not just spend. Earn. Send invoices. Collect payments. Everyone's building the credit card for AI. Nobody's building the paycheck. Built it in 6 weeks. No engineering team. 110+ pull requests, zero rollbacks. A+ on bank-grade security scanners. The AI agent economy will be larger than India's GDP by 2030-31. McKinsey says $3-5 trillion in agentic commerce. India's GDP is about $4 trillion. The math works. The financial stack for agents will follow the same path Indian fintech took from 2016 to 2020. Payments first. Then banking. Then investments. Then credit. We're at payments. That's where every financial revolution starts. Shoutout to AIM Network for having me on. Interview just went live. One question: would you let an AI agent spend money on your behalf? Yes or no.

AI will soon decide whether you deserve a loan or not! Right now, millions of people: – pay bills on time – run small businesses – use UPI daily …but still struggle to get loans. Why? Because they don’t have a traditional credit history. No CIBIL score = “high risk.” But AI is changing that. India is now combining AI with its Digital Public Infrastructure — Aadhaar, UPI, Jan Dhan, GST, Account Aggregators, ULI (Unified Lending Interface), etc. Which means lenders can now analyse: – UPI transaction history – GST records – utility bill payments – bank cash flow – land records – digital spending behaviour instead of relying only on credit scores. Think about how powerful this is. A small shop owner in Surat or a freelancer earning online may finally become “visible” to the financial system. And this is not small. Reports estimate AI-driven lending could unlock a ₹11–14 lakh crore ($130–170B) credit opportunity, especially for MSMEs and first-time borrowers. But this also changes something deeper. Your financial behaviour is becoming your identity. Not just: “Did you repay a loan?” But: “How do you transact daily?” In the future, your UPI habits may matter more than your credit card history. And honestly? That’s both exciting and scary. Because AI may finally give loans to people banks ignored for years… …but it also means the system will watch financial behaviour much more closely. Most people still think AI is just ChatGPT. Meanwhile, it’s already deciding who gets access to money. Would you trust AI to decide your loan eligibility? #AI #Fintech #PersonalFinance #Lending #UPI #FinancialInclusion #India #linkedin

India’s FinTech industry is entering a new phase — where AI is no longer just an add-on, but the core growth engine. From AI-powered fraud detection to smart credit scoring and personalized financial experiences, Indian fintech companies are rapidly transforming how financial services operate. What’s interesting is that the focus has now shifted from “growth at all costs” to sustainable and intelligent scaling. Investors are becoming more selective, while companies are using AI to improve efficiency, compliance, and customer trust. The next wave of FinTech winners in India may not just be the companies with the most users — but the ones building the smartest and safest financial ecosystems. India is quietly positioning itself as a global AI + FinTech innovation hub. 🚀 #FinTech #ArtificialIntelligence #AI #DigitalPayments #UPI #IndiaTech #FinTechIndia #Innovation #Banking #MachineLearning #StartupIndia #FinancialServices #TechTrends #DigitalTransformation