A report by the RBI’s CAFRAL has linked the growth of digital lending in the fintech sector to the introduction and adoption of UPI and digital payments in the country.
In an index prepared from the World Bank’s data, the report found that adoption and wider usage of digital payments led to a rise in Fintech activity globally.
In the context of India, it found that a rise of 10% in per capita UPI transactions leads to a growth of 4.6% in per capita fintech lending.
The report analysed data from 2018 to 2022 to find out that the trend in fintech lending and UPI transactions moved in tandem.
As compared to lending by Scheduled Commercial Banks, Fintech lending depicted a higher association with growth in UPI.