How digital public infrastructure is rewriting credit assessment for first-time borrowers

If you have never taken a loan, you must understand that digital public infrastructure (DPI) plays a vital role. It is changing how lenders evaluate creditworthiness, especially for people who are new to borrowing. "DPI is shifting credit from a collateral-based to a data-driven model, turning 1st-time borrowers into creditworthy participants," says Paramdeep Singh, founder of Long Tail Ventures and a veteran in financial services.

Companies like CASHe, KreditBee, and Nira use alternative data points—such as rent payments or e-commerce purchases—to create credit profiles for first-time borrowers.

Traditionally, banks relied on past repayment records and credit bureau scores to assess a borrower’s trustworthiness. But for millions of Indians without a formal borrowing history, this often meant exclusion from the financial system.

"With over 450 million credit-invisible individuals now reachable through Aadhaar, UPI, and the Account Aggregator network, lenders can evaluate eligibility using verified digital cash flows instead of traditional credit scores. I anticipate a substantial decrease in turnaround times and broader access to formal credit, provided that consent, privacy, and transparency remain central to the framework," adds Singh.

According to a recent report by the Reserve Bank of India, digital footprints—from utility bill payments and mobile transactions to savings patterns—are helping institutions create a more comprehensive picture of financial behaviour.

Sarika Shetty, Co-founder & CEO of RentenPe, stated that India’s digital public infrastructure has revolutionised identity verification and payments; the next frontier is turning creditworthiness into a public good. "For millions of first-time borrowers—especially tenants and urban migrants—rent is their most consistent source of income, yet it remains invisible to the credit system," said Shetty.

Through the Account Aggregator system, borrowers can voluntarily and securely share their financial data from multiple sources. This includes salary credits, tax filings, and digital payment history, providing lenders with verified, consent-based information that reduces risk and speeds up loan approvals.

Shetty states, "By integrating borrowers' KYC, verified agreements, and payment rails within India’s DPI stack, digital platforms are allowing lenders to shift from static identity checks to dynamic, behaviour-based eligibility. This shift from examining who you are to how you pay is the basis of a more inclusive credit economy, one that recognises everyday financial discipline as a way to access opportunities."

In short, DPI is changing not only how creditworthiness is assessed but also who gets the opportunity to be evaluated.