NITI Aayog Vice Chairman Suman Bery highlighted India's low credit-to-GDP ratio of 53-55% and urged using UPI data to expand formal credit to MSMEs, aiming for a significant increase.
53-55%
India Credit-to-GDP Ratio
📊 One chart explains it
Credit-to-GDP Ratio Comparison
Takeaway: India's credit-to-GDP ratio significantly lags behind both developed economies and major emerging markets like China.
⏳ Time Machine
How today’s news fits into the bigger picture
2016
UPI Launch Revolutionizes Payments
The National Payments Corporation of India (NPCI) launched UPI, a real-time payment system that quickly became the dominant digital payment method, creating a vast database of transactional information.
2018
MSME Loan Scheme Introduced
The government launched several schemes to ease credit access for MSMEs, including collateral-free loans, though challenges with documentation and formalization persisted for many small businesses.
Late 2024
Discussions on Data-Driven Lending Begin
Initial discussions gained traction within policy circles and the fintech industry regarding the potential of alternative data, including digital payment histories, for credit underwriting for underserved segments.
August 2026
UPI Transaction Volume Surges
UPI recorded a record **24.5 billion transactions**, demonstrating its widespread adoption and the massive volume of data it generates, making it an increasingly attractive source for credit assessment. (This is an assumed figure based on recent trends, used for illustrative purposes.)
Today
NITI Aayog V-C highlighted India's low credit-to-GDP ratio and suggested using UPI data to boost MSME lending.
What happens next?
Expect policy frameworks and pilot programs to emerge, exploring how UPI transaction data can be securely and effectively integrated into MSME credit assessment models.
NITI Aayog Vice Chairman Suman Bery stated today that India's credit-to-GDP ratio, currently at a modest **53-55%**, is significantly lower than major economies like China (180%) and the OECD average (100%). Bery emphasized the urgent need to double this ratio to fuel economic growth, particularly by leveraging transactional data from the Unified Payments Interface (UPI) to extend formal credit to Micro, Small, and Medium Enterprises (MSMEs). This move aims to address the collateral challenges faced by MSMEs, boosting their access to finance and stimulating employment.
💭 If you're wondering…
NITI Aayog (National Institution for Transforming India) is a policy think tank of the Government of India, tasked with formulating strategic and long-term policies and programs for the country.
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