AI and data science: Changing digital lending industry in India

financialexpress.com:

By Mehak Srivastava

The digital lending industry in India is witnessing rapid growth, driven by the increasing demand for credit from various segments of the population, especially the underserved and unbanked. Reports suggest that India’s digital lending market is projected to reach $515 billion by 2030, up from $38.2 billion in 2021, with a compound annual growth rate (CAGR) of 33.5 percent. 

One of the key factors that is enabling this growth is the adoption of artificial intelligence (AI) and data science technologies by digital lending platforms. These technologies are transforming how credit is assessed, disbursed, and collected, making the process more efficient, accurate, and inclusive. The evolution in technology has also extended its influence on the gold loan industry, introducing efficiency and precision to a sector deeply rooted in India’s cultural and economic fabric.

AI and data science for credit assessment

Digital lending struggles because it’s hard to evaluate the creditworthiness of potential borrowers, especially if they’re new to borrowing or lack a credit history. The usual ways of checking, like credit reports and bank statements, might not show the full picture. That’s where AI and data science can help. It uses diverse sources like social media, phones, online transactions, behavioral patterns, and psychometric tests to understand more about a person’s money situation and predict if they can repay a loan. AI and data science use fancy techniques like machine learning to analyze all this information. 

When digital lending platforms use AI and data science, they can make better decisions about who should get a loan. This means fewer people will fail to pay back loans, more people will get