India’s Unified Payments Interface (UPI) has succeeded in increasing financial inclusion and promoting equitable economic growth. According to a new study by IIM and ISB, UPI has enabled underserved groups, including subprime and new-to-credit borrowers to access formal credit for the first time. The report titled ‘Open Banking and Digital Payments: Implications for Credit Access’ said, that the success of UPI can be replicated in other countries and India can play a leading role in helping them adopt the fintech system.

 

 

The study also highlights that despite the credit surge, default rates did not rise, showing that UPI-enabled digital transaction data helped lenders expand responsibly. Since UPI’s launch in 2016, it has transformed financial access in India, enabling 300 million individuals and 50 million merchants to perform seamless digital transactions.