Account Aggregators: All set now to multiply our digital dividends

This digital public infrastructure enables affordable microcredit and should turbocharge lending

- V. ANANTHA NAGESWARAN & KAMYA CHANDRA

Change happens slowly, and then all at once. And so it will be with the way a billion Indians access loans and, by extension, the way Indians access opportunity.

In 2009, such a change was unimaginable. Formal loans at scale were a quixotic moonshot—80% of adults didn't even have a bank account, let alone access to credit. Yet, quietly, the Lego blocks of a solution were laid.

First, via Aadhaar's eKYC, identity verification became universally available digitally, and India opened half a billion new accounts. Then Aadhaar eSign was launched, allowing any loan agreement to be signed digitally via a mobile phone. By 2015, DigiLocker had been introduced; it became a single window for multiple KYC affirmations and underwriting of documents (Aadhaar, PAN, Udhyam and state-wise vehicle/land credentials).

The slow-burn effect of these interventions on GDP growth wouldn't catch eyeballs until years later.

In 2016, a new block was introduced. In December, the Prime Minister announced the facility to pay anyone with just a mobile phone and QR code, across any account, using any app. It worked. Seemingly overnight, Indians went from dealing in cash to transacting digitally via UPI. Within two years, we added Bharat Bill Payments (BBPS), formalizing payments across a staggering array of bills (utilities, telecom, fees and loans). Then 2020 saw the launch of UPI Autopay, a low-cost loan repayment mechanism.