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AI Changing The Money Lending Landscape?

Lending is a massive business globally as well as in India which directly and indirectly touches almost all parts of the economy. Business of lending is a regulated business in India and it is carried only in a prescribed manner and with the approval of the Reserve Bank of India (RBI). Companies which carry on the business of lending or financing, are known as Non-Banking Financial Companies (“NBFCs”). And, the major technology driving the lending landscape is Artificial Intelligence which contributes by opening up the possibility of using different metrics to assess a borrower’s credit score. 

Artificial intelligence and its applications have made a significant impact. Defined as a technique enabling machines to mimic human behaviour, AI is used to automate processes at an increasing rate. For instance, while looking at the data of an individual’s mobile phone, AI models can predict their possible loan repayment behaviours, analysis of their bank statement through AI models can predict possible crunch periods, and there are hundreds of similar use cases. Artificial Intelligence allows those models to change itself without any further intervention from individuals. This will eventually change the way of loan underwriting by lending companies. Lot of people call it a paradigm shift of underwriting.

Benefits of AI

AI is not a new phenomenon, it has been around for almost 50 years, learning constantly, almost on a daily basis. As we evolve and become more efficient, artificial intelligence grasps to better imitate human intelligence, businesses advantage from improved process and operational efficiency. India has the world’s second largest customer base and as such can acquire major benefits, wherein humans and machines can enhance each other’s complementary strengths. The potential for AI in India is vast and a recent report by Accenture says that AI has the potential to add $957 billion, or 15% of India’s current gross value, by 2035.

Also an analysis by PWC predicts that AI could contribute up to $15.7 trillion to the global economy as soon as 2030. Of this, $6.6 trillion will likely come from increased productivity; $9.1 trillion, from consumption side effects. 

The influence of AI is enormous, going as far as changing the way people in the industry communicate with borrowers. AI will open digital lending to a bigger variety of businesses, allowing lending to be rooted into different industries. But the majority of loans can be provided by smaller companies, making lending more accessible.

The technology will act as an enabler for innovation and risk mitigation as it will be a key lead for digital lending companies. Emphasis on data science and analytics will remove the risk of fraud and delinquencies. While also acts as a driver to navigate consumers through credit complexities created by covid-19.

LenDenClub is India’s largest alternate investment platform which started operations in India in 2015. We have been helping investors diversify their investments beyond traditional investment instruments ever since.



The Reserve Bank of India does not accept any responsibility for the correctness of any of the statements or representations made or opinions expressed by Innofin Solutions Private Limited, and does not provide any assurance for repayment of the loans lent through its platform.

LenDenClub is an Intermediary under the provisions of the Information Technology Act, 2000 and virtually connects lenders and borrowers through its electronic platform via the website and/or mobile app.

The lending transaction is purely between lenders and borrowers at their own discretion, and LenDenClub does not assure loan fulfilment and/or investment returns. Also, the information provided on the platform is verified or checked on the best efforts basis without guaranteeing any accuracy of the data/information verification. Any investment decision taken by a lender on the basis of this information is at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower, fully or partially. The risk is entirely on the lender. LenDenClub will not be responsible for the full or partial loss of the principal and/or interest of lenders’ investment amounts.


*P2P investment is subject to risks. And investment decisions taken by a lender on the basis of this information are at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower.

** Average value mentioned is the weighted average of returns received by investors

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