siliconindia | | SEPTEMBER 20259allow Aadhaar-based e-KYC for small loans up to Rs 50,000 without face-to-face verification.Similarly, DigiLocker integration lets borrowers link digital copies of PAN, address proof or pay slips. These tools cut traditional bottlenecks, as the Unified Lending Interface (ULI) framework notes, integrating Aadhaar and DigiLocker `minimises bottlenecks in traditional lending processes'. In practice, a borrower's phone can be a full-service branch from ID verification to loan disbursal via UPI eliminating the need to visit banks.RBI's ULI RevolutionBuilding on UPI's success, the RBI's new ULI platform is open infrastructure that connects lenders, fintechs, and data providers through APIs. ULI aggregates a borrower's data (bank statements, GST returns, utility payments, transaction history, etc.) with consent. This lets lenders underwrite micro-loans even with no credit bureau history.For example, the RBI Innovation Hub is piloting gig-worker loans that tap into Uber/Ola trip data and Swiggy/Zomato delivery logs as proof-of-income. In a ULI trial so far, over 600,000 loans (Rs 27,000 crore) have been disbursed via this consent-layered ecosystem. The ULI also enforces compliance: all connected lenders must follow RBI's digital-lending rules, ensuring borrower protection even as credit expands.Real Stories of Digital Lending TriumphsHDFC Bank's GIGA ProgramRecognizing 30 million gig workers with limited credit access, HDFC Bank launched `GIGA' a digital-first lending suite for freelancers (Aug 2024). GIGA offers flexible savings accounts, collateral-free business, car, two-wheeler loans, and insurance tailored to gig workers' needs. The bank conducted deep consumer research to design the products. By using mobile apps and relaxed KYC for small loans, HDFC is bringing formal credit to drivers, delivery personnel, and independent contractors who often rely on cash.RBI Innovation Hub + Vivifi (Gig Loans Pilot)The RBI Innovation Hub partnered with fintech Vivifi Finance to pilot unsecured loans for cab and delivery drivers. Launched in late 2024, the platform uses drivers' alternate data (ride-earnings records, digital payments, employment data) to underwrite loans.For example, a driver's bank statement plus app data (trips per week, ratings) feed an AI model that approves loans on request. The pilot feeds into the ULI, once mature, it will route gig-worker borrowers onto the unified credit network. This approach bypasses traditional salary slips (which drivers lack) by proving creditworthiness through consistent gig incomes.Hidden Challenges of Digital Lending· Scams and Unauthorized Apps: The rise of digital lending has attracted scammers. Hundreds of unauthorized apps masquerade as legit lenders, stealing data, charging hidden fees, or harassing borrowers. Regulators and platforms like Google have removed thousands of illicit apps, but threats persist. Responsible lenders strengthen device-binding checks and educate users to rely on official channels.· AI Pitfalls and Fairness: AI models can encode biases, disadvantaging women, low-income groups, or borrowers without digital footprints. Lenders diversify data inputs and audit systems, but transparency remains limited.· Loan Risks: High-interest, unsecured loans raise credit and borrower stress concerns.· Regulatory Uncertainty: Evolving data privacy and RBI rules require continuous adaptation.Wrapping It Up!India's nascent digital credit ecosystem is redefining lending. By turning phones into banks and data into credit, fintechs are opening doors for millions once ignored. The journey isn't without risks, but with responsible practices, India's underbanked can finally step into a future where access, speed, and fairness redefine financial inclusion.
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