Rising KashmirRising KashmirRising Kashmir
  • Home
  • Top Stories
  • News
    • Kashmir
    • City
    • Jammu
    • Politics
  • Health
  • Anchor
  • Features
  • Interview
  • Video
Search

Archives

  • May 2025
  • April 2025
  • March 2025
  • February 2025
  • January 2025
  • December 2024
  • November 2024
  • October 2024
  • September 2024
  • August 2024
  • July 2024
  • June 2024
  • May 2024
  • April 2024
  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022

Categories

  • Anchor
  • Breaking
  • Business
  • City
  • Developing Story
  • Editorial
  • Education
  • Features
  • Health
  • Interview
  • Jammu
  • Jammu and Kashmir News
  • Kashmir
  • Kashmir Tourism
  • Kath Bath
  • National
  • Opinion
  • Politics
  • Sports
  • Technology
  • Top Stories
  • Trending
  • Uncategorized
  • Video
  • Viewpoint
  • World
© 2022 Foxiz News Network. Ruby Design Company. All Rights Reserved.
Reading: UPI: A game-changer for financial inclusion in India
Share
Notification Show More
Font ResizerAa
Rising KashmirRising Kashmir
Font ResizerAa
  • Home
  • Top Stories
  • News
  • Health
  • Anchor
  • Features
  • Interview
  • Video
Search
  • Home
  • Top Stories
  • News
    • Kashmir
    • City
    • Jammu
    • Politics
  • Health
  • Anchor
  • Features
  • Interview
  • Video
Follow US
© 2024. All Rights Reserved.
Rising Kashmir > Blog > Anchor > UPI: A game-changer for financial inclusion in India
Anchor

UPI: A game-changer for financial inclusion in India

Aatif Qayoom
Last updated: December 8, 2024 1:39 am
Aatif Qayoom
Published: December 8, 2024
Share
6 Min Read
SHARE

By Oct 2023, UPI powers 75 PC of retail digital payments in India
Connecting 300 million users and 50 million merchants

 

Srinagar, Dec 07: The Unified Payments Interface (UPI), launched in 2016 by the National Payments Corporation of India (NPCI), has emerged as a cornerstone of financial inclusion and access to credit in India.
By seamlessly integrating digital payments with open banking principles, UPI has enabled users to establish verifiable financial transaction histories, bridging the gap between traditional banking systems and underserved populations, particularly those without prior credit histories.
UPI’s rise has been nothing short of meteoric. By October 2023, it accounted for 75% of all retail digital payment transactions in India, facilitating over 10 billion transactions each month. With more than 300 million individual users and 50 million merchants, UPI has penetrated every corner of the Indian economy—from small roadside vendors to large retailers. Its success is rooted in a robust digital infrastructure, supported by a series of complementary initiatives.
NPCI, a quasi-government entity, played a key role in UPI’s development, ensuring it remains free for both consumers and merchants. Complementing this, the Pradhan Mantri Jan Dhan Yojana (PMJDY) and the advent of affordable internet services by Reliance Jio laid a strong foundation for UPI’s widespread adoption. Data from Rising Kashmir reveals that credit access in India has long been constrained by limited credit histories, with 82% of the adult population classified as underserved or unserved by formal credit markets as of 2022.
UPI has been instrumental in addressing this gap, allowing lenders to assess borrowers based on their digital transaction histories. From 2015 to 2019, the impact was profound: loan growth and credit extended to subprime and new-to-credit borrowers surged by 15% in regions with high UPI adoption.
Fintech lenders, leveraging UPI data, saw a 40-fold increase in loans to subprime borrowers, compared to just a 14% growth by traditional banks. Fintech companies prioritized new-to-credit customers, accounting for a significant portion of the 40% rise in loans across underserved regions.
The relationship between UPI adoption and traditional banking inclusion is equally striking. Areas with higher PMJDY account penetration saw a sharper increase in credit access, highlighting the synergies between these two initiatives. By 2016, 99% of Indian households had access to bank accounts, a critical prerequisite for utilizing UPI.
The geographic reach of UPI has been equally impressive. In areas with early adoption, credit to underserved borrowers rose by 11%, showcasing UPI’s potential to unlock financial access for marginalized communities. The entry of Reliance Jio into the market in 2016 was a game-changer, drastically reducing internet data costs from ₹228 per GB in 2015 to just ₹9 per GB by 2020. This dramatic decrease in data costs enabled millions of people to access digital payment platforms like UPI.
Fintech lending in regions with early Jio adoption saw exponential growth. High-exposure pin codes reported a 102-fold increase in loans to new-to-credit customers. Moreover, the average distance to a reliable 4G tower dropped from 15.1 km in 2016 to just 2.1 km by 2020, further lowering barriers to UPI adoption.
UPI has had far-reaching implications for the broader economy. Small-ticket loans facilitated by UPI have empowered micro-enterprises and boosted consumption. While fintech lenders have focused on serving underserved borrowers, traditional banks have expanded their services to prime borrowers in rural and semi-urban areas. By 2019, fintech loans to underserved borrowers were comparable to those issued by banks, marking a significant shift in the lending landscape.
Despite its success, UPI faces ongoing challenges. Ensuring the sustainability of its zero-cost model for users, while maintaining robust cybersecurity, remains a critical concern. Policymakers are exploring the possibility of introducing nominal transaction fees to support infrastructure maintenance and prevent overuse.
Globally, UPI’s model has garnered attention as a replicable blueprint for financial inclusion. Policymakers from countries such as the U.S. and organizations like the World Bank have lauded its design. UPI stands as a case study for leveraging digital infrastructure to drive inclusive growth.
As UPI continues to evolve, it holds the potential to further strengthen India’s financial ecosystem and provide a scalable solution to long-standing challenges in credit access. By integrating open banking, digital payments, and affordable connectivity, UPI has empowered millions of underserved individuals and businesses. With its continued growth, UPI is not only reshaping financial inclusion in India but also setting an example for the rest of the world.

Key Data Highlights:
15% increase in credit in high UPI adoption regions
102x rise in loans to new-to-credit borrowers in UPI areas
Internet data costs dropped from ₹228/GB in 2015 to ₹9/GB in 2020
UPI now drives 75% of retail digital payments in India

 

In a first, camera captures rare ‘Western Tragopan’ in Tatakuti Wildlife Sanctuary
Kashmir’s mushroom delicacies: Shajkan & Gucchi take center stage in spring
LOVE FOR FORGOTTEN: Baramulla’s ‘Hope for Strays’  an initiative to save, aid  stray animals 
‘Will see soon heroes from Kashmir in Bollywood industry’: Shakti Kapoor
Art 370 breaks new ground: A story of hope, courage, & redemption 

Sign Up For Daily Newsletter

Be keep up! Get the latest breaking news delivered straight to your inbox.
By signing up, you agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.
Share This Article
Facebook Whatsapp Whatsapp Copy Link Print
ByAatif Qayoom
Aatif Qayoom is a Senior Correspondent at Rising Kashmir, covering crime, tourism, sports, and various social issues across Jammu and Kashmir. Known for his accurate and ground-based reporting, he highlights stories that matter to people.
Previous Article In J&K, over 3 lakh people diagnosed with diabetes: Health Ministry
Next Article J&K reports zero Hepatitis-B deaths for six consecutive years: Health Ministry
Leave a Comment Leave a Comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Stay Connected

1MFollowersLike
262kFollowersFollow
InstagramFollow
234kSubscribersSubscribe
Google NewsFollow

Latest News

Hyderpora underpass turns into cab stand, sparks safety concerns
City
May 26, 2025
Bear-Proof Corral unveiled to tackle human-wildlife conflict in Drass
Kashmir
May 26, 2025
SACPPE holds session to safeguard children from unexploded shells in Uri
Kashmir
May 26, 2025
‘Prem Visheshagya’ brings laughter to Natrangs’ Sunday theatre
Jammu
May 26, 2025

Recent Posts

  • Hyderpora underpass turns into cab stand, sparks safety concerns
  • Bear-Proof Corral unveiled to tackle human-wildlife conflict in Drass
  • SACPPE holds session to safeguard children from unexploded shells in Uri
  • ‘Prem Visheshagya’ brings laughter to Natrangs’ Sunday theatre
  • Admin spreads awareness on drug abuse in Sgr

Recent Comments

  1. SavePlus on AI and Behavioural Analytics in Gaming: Making the World of Gaming Better
  2. Parul on Govt acknowledges faulty streetlights on Narbal-Tangmarg road
  3. dr gora on Women Veterinarians and the Goal of Viksit Bharat
  4. jalwa game login on National Education Policy 2020: Transforming India’s Educational System
  5. Virender Bhat on Pahalgam Attack: A War on Humanity, Peace, and Kashmiriyat

Contact Us

Flat No 7,Press Enclave, Srinagar, 190001
0194 2477887
9971795706
[email protected]
[email protected]

Quick Link

  • E-Paper
  • About Us
  • Contact Us

Top Categories

Stay Connected

1.06MLike
262.5kFollow
InstagramFollow
234.3kSubscribe
WhatsAppFollow
Rising KashmirRising Kashmir
Follow US
© 2025. All Rights Reserved.
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?