How digital lending is expanding access
Digital lending has grown rapidly in recent years, improving access to credit for a wider range of consumers.
Garg highlighted that cumulative digital loan disbursals in India have crossed 11 crore loans, valued at nearly ₹2.9 lakh crore, reflecting strong year-on-year growth.
This expansion is being enabled by digital infrastructure such as Aadhaar-based eKYC, UPI payments, and increased smartphone penetration, which reduce onboarding and credit assessment costs.
Lenders are also using alternative data models to evaluate borrowers without traditional credit histories, expanding access to first-time borrowers and underserved populations. Fintech transactions across lending, payments, and neobanking have reached approximately Rs 68 trillion, demonstrating the scale of the sector.
How green finance adoption is growing
Consumer interest in green finance products, including EV loans, solar financing, and ESG-linked investments, has increased over the past few years.
According to Garg, this growth is being driven by rising awareness of sustainability and the expansion of the electric mobility and renewable energy sectors.
For example, EV sales in India crossed 1.97 million units in FY25, growing nearly 17% year-on-year, increasing demand for financing solutions for two-wheelers, three-wheelers, and other small vehicles. Interest in solar rooftop loans and green home financing is also rising, suggesting that sustainability is becoming an important consideration in personal financial planning.
How consumers face financial planning challenges
Despite growing adoption, consumers may face challenges when integrating green finance into their personal budgets. Higher upfront costs, limited knowledge of specialized financing options, irregular income, and difficulty assessing long-term savings can complicate budgeting decisions.
Garg noted that many consumers still rely on standard personal loans, which may not always align with their financial goals or repayment capacity.
How risks are managed in digital lending
While digital lending has expanded credit access, it has also introduced risks, including over-indebtedness and hidden costs. Delinquency rates for small-ticket digital loans in India reached 3.6% of loans overdue by more than 90 days in 2025, the highest level in six quarters.
Garg emphasised that transparent disclosures, responsible lending practices, and regulatory oversight are essential to ensure sustainable growth in the sector.
How lenders balance access and credit risk
Fintech and green finance providers are using technology-driven underwriting and alternative data sources, such as payment histories and mobile usage patterns, to extend credit responsibly. First-time borrowers now account for 58% of digital loan users in India, reflecting the reach of these technologies.
In green finance, lenders are partnering with OEMs, mobility platforms, and energy companies to integrate financing at the point of purchase and use asset-level data—such as EV usage or solar system performance—to manage risk.
AI-based credit assessments, risk-based pricing, and structured repayment schedules help maintain credit discipline while keeping green financial solutions accessible to a wider population.
