DIGITAL LENDING PLATFORMS AND CREDIT ACCESS FOR MICRO-ENTREPRENEURS IN SEMI-URBAN INDIA

Indias digital lending market has expanded rapidly over the past four years, driven by alternative-data credit scoring, the Reserve Bank of India's evolving regulatory framework, and public digital infrastructure such as the Unified Lending Interface. This paper reviews the scale of this growth, the mechanisms that allow digital lenders to serve micro-entrepreneurs traditional banks have historically underserved, and the regulatory measures introduced to curb predatory practices and unauthorised apps. It then examines a central unresolved tension: whether digital lending infrastructure genuinely deepens credit access in semi-urban and rural India, or primarily channels more credit through populations already reasonably served by the formal financial system. The paper concludes that the evidence is genuinely mixed, and that this ambiguity, rather than a settled success story, is the more accurate and more useful framing for continued policy attention.