Part 1: Powering Viksit Bharat 2047

How AI Is Expanding Financial Access: Bridging India’s Credit Gap for Viksit Bharat 2047

Meena runs a small grocery store in her hometown. She pays her electricity bills on time, manages her daily transactions via UPI, and even keeps in touch with suppliers on WhatsApp. Yet when she applied for a loan to expand her shop, the bank turned her down. The reason? She had no formal credit history. Meena’s story reflects the struggles of millions of farmers, gig workers, and small entrepreneurs across India. They are financially disciplined in practice but remain excluded from formal credit systems that depend on limited and outdated indicators of creditworthiness.

As India advances toward Viksit Bharat 2047, the national vision to transform India into a fully developed, inclusive, and innovation-led economy by its 100th year of independence, bridging this credit access gap becomes mission-critical. And this is where advance AI systems (AI Models, Agentic AI, AI Agents, GenAI, LLMs) are driving the fundamental shift.

Inclusion Beyond Accounts

India has made remarkable progress in building the foundation for financial inclusion, including:

• Pradhan Mantri Jan Dhan Yojana (PMJDY), a nationwide program to provide every household with a basic bank account, has opened over 55 crore bank accounts.
• The JAM trinity (Jan Dhan, Aadhaar, Mobile) has created digital rails for payments and identity.

These initiatives were historic because for the first time, millions gained a bank account and a digital identity. But financial inclusion cannot simply stop at opening accounts. Despite this progress, gaps remain. Many accounts continue to be dormant or underutilized, and customers still struggle to access financial services such as credit and insurance. For borrowers like Meena, having an account alone doesn’t translate to growth opportunities. True inclusion is about empowerment. It is about giving people the ability to use financial services to start or grow a business, protect their families, and build resilience against life’s uncertainties.

Why Traditional Credit Models Exclude Millions

For countless hardworking individuals in India, a major roadblock to growth is not their lack of ambition, but a lack of credit access. Traditional lending models rooted in decades-old assumptions often fail to recognize the reality of today’s informal, digital-first economy. Here’s a closer look at the systemic hurdles that keep millions outside the credit net:

• Formal credit histories: Traditional underwriting depends on credit records that many first-time borrowers don’t have.
• Collateral requirements: Small entrepreneurs rarely own assets that meet formal lending criteria.
• Operational costs: Extending branch-based processes to small towns makes small-ticket lending costly.
• Inflexible systems: Legacy credit models were not designed for gig workers, micro-entrepreneurs, or informal traders with irregular income patterns.

How AI Opens the Door

This is where AI creates new possibilities. Instead of depending only on traditional data, AI can analyze alternative signals that more accurately reflect real financial behavior.

Examples include:

• Utility bill payments that show consistency in paying electricity or water bills.
• UPI and digital wallet activity that reflects steady income flows and spending patterns.
• GST filings, cash flows, and similar small business records as proof of ongoing business activity.
• Mobile usage and recharge patterns that correlate with financial stability.
• Behavioral indicators that reveal repayment intent beyond credit bureau scores.

With these insights, AI helps lenders build inclusive credit profiles for customers like Meena. It enables faster and fairer loan approvals for the underserved/unserved population. It allows banks to offer not only a single product but a full portfolio of services like credit, savings, insurance, and protection, tailored to each customer’s needs. For the first time, people who were previously invisible to banks can now be seen as viable borrowers.

From Access to Empowerment

Real inclusion means creating pathways for people to grow, not just exist within the system. For Meena, a small shop owner, it’s the ability to stock up before the festive season, meet surging demand, and earn the income that helps her family thrive. For a farmer in a rural village, it’s securing crop insurance alongside a seasonal loan, protecting against the unpredictability of monsoons and market prices. For a gig worker navigating irregular income, it’s receiving timely nudges to save during peak earning months, building a safety net for leaner times. These aren’t just transactions, they’re turning points. And when designed responsibly, AI not only open doors to financial services but also gives people the tools to build better futures on their terms.

AI in Action: First Steps

Banks and NBFCs are beginning to experiment with AI to bridge the credit gap and support first-time borrowers. Early use cases are already showing promise, including:

• Smarter credit assessments with reliable decision support that combine traditional and alternative data to speed up decisions.
• Simplified onboarding journeys powered by automation and digital verification to reduce drop-offs.
• Faster turnaround times that make small-ticket lending viable, even in underserved areas.

These early applications show how AI can turn financial inclusion from a policy aspiration into practice, helping individuals like Meena move from simply having access to truly being empowered.

Why This Matters for Viksit Bharat 2047

India’s vision to become a developed nation by 2047 will depend on ensuring that every citizen has not only an account but also access to the full spectrum of financial services. Meena’s story cannot remain the norm. Millions like her must be recognized for their financial discipline, granted fair access to credit, and supported with products that help them thrive. By leveraging advanced AI systems, financial institutions can unlock inclusion at scale, driving both economic growth and social equity and bringing India closer to the promise of Viksit Bharat 2047.

What’s Next?

Financial inclusion must evolve from providing access to expanding opportunity, which means designing journeys that are smooth, transparent, and aligned with people’s everyday realities. As millions of borrowers like Meena enter the formal financial system, slow onboarding, generic offerings, and confusing processes can no longer be acceptable, especially for a nation striving toward Viksit Bharat 2047. Customers now expect choice, speed, and data security, and it is AI that will deliver these expectations. The next step is to create experiences for them that ensure they remain engaged and empowered.

In the next part of this series, we dive into how AI is redefining these experiences for a confident, upward-moving India.