Financial Inclusion through Policy-Enabled Fintech Innovation: Lessons from India’s Digital Payment and Lending Ecosystem
Keywords:
Financial Inclusion, Fintech Innovation, Digital Payments, Digital Lending, Policy Interventions, UPI (Unified Payments Interface), Direct Benefit Transfer (DBT)Abstract
Over the past decade, India has witnessed a dramatic transformation in its financial ecosystem, driven by the convergence of digital technologies, innovative fintech solutions, and proactive public policy interventions. This paper examines how policy-enabled fintech innovation has facilitated financial inclusion, particularly through digital payments and digital lending. Using a mixed-method approach, incorporating secondary data from the RBI, NPCI, and government reports, and primary insights from stakeholder interviews, the study analyzes the impact of key policy initiatives such as the Unified Payments Interface (UPI), Direct Benefit Transfer (DBT), JAM trinity, and P2P lending regulations. The findings reveal that state-led initiatives have significantly increased access, usage, and affordability of financial services, especially among rural populations and micro-enterprises. Simultaneously, regulatory clarity, sandbox programs, and inclusive policy measures have catalyzed fintech innovation while ensuring consumer protection and system stability. The paper concludes by offering policy recommendations for enhancing digital financial inclusion, scaling fintech innovation, and bridging remaining gaps in access and adoption.
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