Book Title: Multidisciplinary Research in the Age of Artificial Intelligence
Chief Editors: Dr. Jagdish Kumar Sahu, and Dr. Byram Anand
Associate Editors: Dr. J. Jayamani, and Albeen Josebh Ahmed
Co-Editors: Dr. Sunakshi Verma, and Mr. Pankaj Bharat Devre
ISBN: 978-93-7183-018-8
Chapter: 21
DOI: https://doi.org/10.59646/781/21
Authors: Mr. Pushkaraj Sanjay Rokade, Shivshakti Nanda
Abstract
Financial inclusion remains a central policy objective in emerging economies such as India, where a large share of the population continues to operate outside formal credit markets despite near-universal access to basic banking. Traditional credit assessment relies heavily on documented financial histories such as bank statements and repayment records, which excludes informal workers, small traders, and first-time borrowers who lack such records even though many are creditworthy. Alternate credit scoring, which draws on non-traditional data sources including mobile usage, digital transaction patterns, and utility bill payments, has been proposed as a mechanism to close this gap. This study examines the role of alternate credit scoring in promoting financial inclusion among under-served customers in Maharashtra. Using a descriptive and analytical research design, primary data were collected from 120 respondents comprising borrowers and lending professionals through a structured questionnaire, and supplemented with secondary data from Reserve Bank of India and World Bank publications. The results indicate that while all respondents held a bank account, over half had experienced loan rejection, and awareness of alternate scoring remained moderate at 55 percent. A majority of respondents perceived alternate credit scoring favourably, associating it with faster processing, reduced paperwork, and improved access for those lacking a formal credit history, although data privacy concerns were reported by more than 61 percent of respondents. The study concludes that alternate credit scoring offers a meaningful pathway toward deeper financial inclusion but requires stronger regulatory safeguards, greater consumer awareness, and enhanced data protection to be adopted responsibly and sustainably.
Keywords: Financial Inclusion; Alternate Credit Scoring; Under-Served Customers; Digital Lending; FinTech; Credit Access; Non-Traditional Data