Indians willing to share financial transactions history to avail loans

Mumbai: Indians are willing to share their financial transaction history digitally through the account aggregator (AA) system if it helps them secure a loan, according to a study by CGAP and Sahamati. The research, conducted with 1,860 smartphone users in late 2024, found that customer awareness and willingness to share data had increased significantly compared to 2023.

Open finance in India has expanded rapidly, with 12 crore accounts linked through AAs as of Dec 2024, up from 3.9 crore a year earlier. "More than 570 regulated financial entities were a part of the AA ecosystem as of Oct 2024," the report said. Over $10 billion in loans have been disbursed since the system’s launch in Sep 2021, with half of the total lending occurring in the last six months.

The share of respondents using AAs for loan applications doubled between 2023 and 2024. In 2024, 20% of respondents said they had applied for a loan in the previous 18 months, and 38% recalled being offered the option to share data through AAs. However, only 3% of the total sample used AAs for loans, as 80% had not applied for credit in that period. "Higher loan amounts and better interest rates were the top motivators for sharing banking data," the report said.

Awareness of AAs also increased, with 30% of respondents who had not engaged with AAs in loan applications reporting they had heard of the service when described to them, up from 12% in 2023. While awareness grew across demographics, the gender gap widened from three to 10 percentage points. Respondents with at least upper secondary education were significantly more aware (35%) than those without (18%). Salaried employees had the highest awareness, while unemployed individuals had the lowest. "79% of respondents found RBI campaigns effective in building awareness and trust," the report stated.

Willingness to share data for better loan offers also rose, with 71% of respondents saying they would consider using AAs for this purpose, up from 33% in 2023. Those willing to share their data increased from 18% to 30%, while those considering it rose from 15% to 41%. The key reasons cited were convenience and trust in banks and lenders. Lack of understanding and the absence of peer usage were major barriers to adoption.

Beyond lending, AAs are also being used for personal financial management (PFM). Over 25% of respondents reported using a consent-based process to share data with PFM apps for financial tracking. "69% of respondents found the consent-based process convenient and easy to use," the report said.

Users reported a positive experience with the AA process. Among those who used AAs for loan applications, 85% rated their experience as "good" or "very good." For PFM applications, 86% expressed a similar sentiment.

"India’s open finance revolution is gaining momentum, with growing awareness and willingness to use AAs," the report said. However, gaps in awareness and adoption, particularly among women and those with limited education, need targeted interventions to ensure inclusivity. Expanding use cases and prioritizing accessibility will be key to unlocking the full potential of AAs.


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