Blitz Bureau
NEW DELHI: Digitalisation has driven financial inclusion in India and Government initiatives in this sector are estimated to triple retail borrowing to about $2.5 trillion, or about 34 per cent of the GDP, by 2023, a report mentioned on July 31. The transformation of India’s savings landscape, and the prospects for lending growth, are underpinned by three key elements — dubbed JAM (Jan Dhan-Aadhaar-Mobile).
Digital technologies have already boosted India’s financial inclusivity, lifting basic savings account ownership to about 77 per cent, up from 35 per cent in 2011, according to the report by S&P Global Ratings.
The growth in retail lending could include an even faster increase in micro-loans, primarily to previously-excluded low-income earners, with such loans potentially accounting for about 7 per cent of household debt by 2030, the findings showed. “Greater credit penetration comes with the risk of higher loan defaults, notably among low-income earners during an economic downturn. Yet, that risk will be mitigated by limited micro-lending by major banks,” said Geeta Chugh, S&P Global rating analyst.
