FinTechs helping bridge India’s MSME credit gap: RBI Governor

Governor Sanjay Malhotra during the inauguration of Global Fintech Fest (GFF) 2026, in Mumbai

FinTech firms are narrowing India’s MSME credit deficit by delivering formal, collateral-free financing to millions of small businesses that conventional underwriting models overlooked for decades, said RBI Governor Sanjay Malhotra.

Key Takeaways

• RBI Governor Sanjay Malhotra said fintechs are helping bridge India’s MSME credit gap with collateral-free financing.
• He said this credit reaches grassroots entrepreneurs, creating jobs and livelihoods nationwide.
• Malhotra called fintech a vital partner in building India’s future financial system.
• He noted fintech has moved banking from physical branches to every citizen’s fingertips over the past decade.

“This credit reaches entrepreneurs at the grassroots level, creating jobs and livelihoods across the country. The Reserve Bank has consistently viewed FinTech as a vital partner in building the financial system of the future,” Malhotra stated during his address at the opening session of the 7th Global Fintech Festival.

Indian finance

The Governor observed that over the past decade, FinTech has fundamentally restructured Indian finance, bringing banking from physical branches to every citizen’s fingertips.

“Today, a shopkeeper in a small town, a farmer in a remote village, and a young professional in a metro city all transact, save, and borrow through the same seamless digital rails of UPI, Aadhaar-Enabled Payment Systems, and the Jan Dhan ecosystem.

“This is financial inclusion not merely as a policy aspiration but as lived everyday reality for hundreds of millions of Indians.

This transformation has been made possible by FinTech, which bridges and connects our vast, diverse population to formal finance faster and more affordably,” he said.

Customer experience

FinTech has also significantly improved customer experience and efficiency across India’s financial infrastructure, reducing account opening and payment settlement times, lowering transaction costs, strengthening fraud detection through AI-driven analytics, and enabling real-time supervision.

Perhaps nowhere is the impact more tangible than credit delivery to MSMEs through cash flow-based lending, account aggregators, and the unified lending interface,” Malhotra noted.

He added that the regulatory sandbox, the Reserve Bank Innovation Hub, and the RBI’s structured dialogues with start-ups, FinTechs, and other stakeholders reflect the conviction that better policy emerges from continuous, open, and constructive engagement.

“We have encouraged self-regulation within the sector. We have supported the development of digital public infrastructure that FinTechs can build upon and have remained open to new ideas and new players,” he added.

“We have promoted responsible innovation while safeguarding the trust that forms the very foundation of finance. We will continue with this approach, guided by a vision to build a financial system that is safer, more trustworthy, more inclusive, fair, efficient, and supportive of economic growth and public welfare,” Malhotra concluded.

Published on September 8, 2026