Credit Scores in India
Alternative Data and the Credit-Invisible
Millions of Indians have no credit history, and lenders are experimenting with data like bills, mobile usage and UPI transactions to assess them.
Widening the net.
Credit invisible
Many workers, especially informal, have no formal borrowing record.
Alternative data
Utility bills, rent, digital payments and cash-flow data can indicate reliability.
Account aggregator
A framework lets users share their bank data with lenders with consent.
Risks
Privacy and algorithmic bias need careful handling.
A cash flow loan
A shopkeeper gets a loan based on his digital sales records, not a credit score.
Assuming alternative data is risk-free
Privacy and fairness matter.
Key takeaways
- Millions lack a credit record.
- Alternative data helps.
- Account aggregators enable consent-based sharing.
- Bias and privacy are risks.
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