Financial services in India have experienced steady change over the past decade. Long queues at branches, lengthy paperwork processes, and limited access once defined the borrowing experience for millions. Today, with the widespread adoption of mobile connectivity and simplified digital interfaces, financial access has become an integral part of daily life for households across the country.

The stage that primarily included financial inclusion is now directing focus on national empowerment, where digital credit can create meaningful opportunities for people and enterprises. This development is less about the convenience of technology and more about the role of credit in strengthening financial resilience and supporting ambition.

Expanding beyond access

With initiatives such as Jan Dhan accounts and microfinance institutions extending services to the last mile, the gap between formal finance and citizens has narrowed. For the first time, millions could save, transact, and secure basic services without relying on informal channels. This expansion created a stronger foundation for households to participate in the broader economy.

The next question is about what this access enables. A bank account by itself is only a start. The real impact lies in whether credit can help a farmer increase yield, a woman open her own small shop, or a gig worker invest in equipment to improve income. These are examples of credit moving from a passive service to an active tool for progress.

Building the next phase of digital credit

The new phase is being shaped by policy initiatives and platforms that bring greater consistency, reliability, and speed into lending. The Unified Lending Interface (ULI) stands out in this regard. By creating a single standardised access point for lenders to draw authenticated data, it reduces the complexity of managing multiple integrations and makes the process more seamless. Lenders can now evaluate borrowers through diverse available digital footprints. This development ensures that groups with no prior formal financial history can still be considered eligible borrowers.

At the same time, regulation is strengthening the ecosystem. The Reserve Bank of India’s Digital Lending Directions 2025 is a significant milestone. It places a strong emphasis on transparency and trust by mandating clear borrower disclosures, standardised formats for information, and stricter privacy measures. Such interventions

make digital credit not only easier to access but also safer for both lenders and borrowers. Together, these efforts signal a maturing environment where innovation is guided by accountability.

Integrating with India’s digital infrastructure

Digital credit does not exist in isolation. Its growth is closely connected to the broader digital infrastructure of the country. The JAM trinity of Jan Dhan accounts, Aadhaar identity, and mobile penetration has provided the base upon which new services can be built. Unified Payments Interface (UPI) has already shown how a straightforward system can achieve mass adoption across all sections of society. A similar pathway is opening for lending through ULI, which is expected to become the credit counterpart of UPI by bringing borrowers and lenders together with efficiency and scale.

This momentum is reflected in market trends. Fintech-led digital lending grew at a 35% CAGR in 2024, according to a report by QED Investors and Boston Consulting Group. The pace is being driven by rising credit demand across micro, small, and medium enterprises as well as households that are becoming more confident in engaging with formal lending systems. The effect of this reach will be particularly significant for communities that previously relied on informal sources of finance at high interest rates.

Responsible and sustainable growth

While digital credit offers promise, its expansion also brings responsibility. Easy access to funds can create vulnerabilities if borrowers are not financially aware or if lending is not monitored closely. Over-indebtedness and misuse of personal data are risks that need proactive management. Household debt stood at 42.9% of GDP at current market prices in June 2024, a figure that underlines the importance of balancing credit expansion with borrower capacity. This makes it essential to combine growth with strong governance, borrower education, and ethical practices from institutions.

A resilient lending system is one that balances opportunity with safeguards. Borrowers must not only receive funds but also be able to repay without distress, using credit to strengthen rather than weaken their economic position. This principle ensures that the system remains stable and continues to build trust among citizens.

India’s journey in financial inclusion is at a critical juncture. Access has been the defining theme of the past decade, but empowerment is the priority of the present. Digital credit can influence the course of lives, improve small businesses, and contribute meaningfully to the economy. The combination of strong regulatory measures, national digital infrastructure, and innovative platforms such as the Unified Lending Interface is preparing the ground for a lending environment that is more inclusive, accountable, and future-ready.

As credit becomes more deeply embedded in everyday financial activity, its role will extend far beyond transactions. It will serve as a bridge to education, healthcare, entrepreneurship, and social mobility. The promise of digital credit lies not only in its reach but in its capacity to deliver growth with responsibility. That will define the true measure of empowerment in the years to come.

(Rohit Garg is the CEO of personal loan platform Olyv)