Mumbai (Maharashtra) [India], September 8 : Reserve Bank of India Governor Sanjay Malhotra on Tuesday said fintech companies are helping bridge India's credit gap for Micro, Small and Medium Enterprises (MSMEs) by extending formal, collateral-light credit to millions of small businesses that were earlier outside traditional lending models.
Addressing the Global Fintech Fest 2026 in Mumbai, Malhotra said the impact of fintech was particularly visible in credit delivery to small businesses.
“Through cash-flow based lending, account aggregators, and platforms like the Unified Lending Interface, fintechs are helping bridge India's MSME credit gap by extending formal, collateral-light credit to millions of small businesses that, for decades, were invisible to traditional underwriting models,” Malhotra said.
“This is credit reaching the last mile of enterprises, powering jobs and livelihoods across the country,” he added.
The RBI Governor said fintech has fundamentally changed the way financial services are delivered in India over the past decade, taking banking services beyond physical branches.
“Over the past decade, fintech has fundamentally reshaped the architecture of Indian finance. It has taken banking from the branch to the hand of every citizen,” Malhotra said.
He said shopkeepers in small towns, farmers in remote villages and young professionals in metropolitan cities are now able to transact, save and borrow using common digital infrastructure such as UPI, the Aadhaar-enabled payment system and the Jan Dhan ecosystem.
“This is financial inclusion not as a policy aspiration but as a lived, everyday reality for hundreds of millions of Indians,” he said.
Malhotra also highlighted fintech's role in improving the efficiency of financial services by reducing account-opening and payment-settlement times, lowering transaction costs, strengthening fraud detection through AI-driven analytics and enabling real-time supervision.
On the RBI's approach towards the sector, Malhotra said the central bank considers fintech a partner in building the financial system of the future.
“The Reserve Bank has consistently viewed fintech as a valuable partner in building the financial system of the future,” he said.
The Governor further pointed to the RBI's Regulatory Sandbox, Reserve Bank Innovation Hub and its engagement with startups and fintech companies, saying better policy comes through “continuous, open and constructive engagement”.
He said the central bank has encouraged self-regulation in the sector, supported digital public infrastructure and remained open to new ideas and players.
“We have promoted responsible innovation while safeguarding trust that is the very foundation of finance,” Malhotra said, adding that the RBI would continue working towards a financial system that is safer, more trustworthy, inclusive, fair and efficient.