Full Breakdown
Fintechs Target India's Underserved Credit Market via UPI
By Drooid · · How we work
The Push to Extend Credit Through UPI
At the Global Fintech Fest in Mumbai, fintech founders, bankers and policymakers gathered to discuss the next phase of India’s digital-payments revolution. The focus shifted from payments to credit, with companies unveiling products that link unsecured loans directly to Unified Payments Interface (UPI) transactions. BharatPe, backed by Tiger Global, launched “BharatPe Flex,” a pre-approved credit line of up to 60,000 rupees that can be used for UPI payments at both online and offline merchants.
Market Size and Current Access Gaps
The credit market in India is estimated to be more than twice the size of the country’s payments market. In the financial year that ended in March, UPI transactions totaled 314 trillion rupees (about $3.2 trillion), with PhonePe and Google Pay handling over 70 % of the volume, according to the National Payments Corporation of India. Paytm ranks third, WhatsApp Pay eighth and Amazon Pay twelfth in transaction share. Deloitte reported that only 15 % of Indian adults have access to formal credit, compared with a global average of 24 %, while over 85 % of micro, small and medium enterprises rely on informal, often usurious financing.
Fintech Strategies and Data-Driven Lending
Fintech leaders argue that the massive data generated by digital transactions can bridge the credit gap. Sameer Nigam, founder and chief executive of Walmart-owned PhonePe, said the abundance of transaction data, e-commerce purchase histories and geolocation information enables firms to assess borrower risk more accurately. Vipin V., managing director and partner at BCG, noted that fintechs have “cracked the model” for small, unsecured loans by leveraging this data and their extensive customer reach.
Official Statements & Responses
Nalin Negi, chief executive of BharatPe, emphasized the company’s aim to make formal credit more accessible to consumers. He described the launch of BharatPe Flex as a response to the low formal-credit penetration and the need for affordable financing for both individuals and small businesses. Industry executives collectively highlighted that digital-payment footprints are expanding the pool of assessable borrowers, allowing fintechs to extend credit with lower acquisition costs than traditional lenders.
Verbatim Quotes
- “We see a significant opportunity to make formal credit more accessible to consumers,” — Nalin Negi, chief executive of the company
