New Delhi, Oct 30: Foreign investors are increasingly turning to India’s financial sector, attracted by the country’s rapid digital transformation and its success in converting millions of previously unbanked citizens into data-rich consumers, according to a recent report by Sunday Independent. The publication urged African nations to emulate India’s model of inclusive digitisation to drive economic growth.
Despite external trade challenges and high account dormancy, India continues to see strong inflows of foreign direct investment (FDI), reflecting investor confidence in its fintech-led evolution. The report highlighted that while India boasts nearly 89 percent adult account penetration, about 25 percent of these accounts remain inactive. Yet, global banking giants such as Citigroup, Barclays, and Japan’s MUFG are expanding their presence, leveraging data-driven credit scoring and innovative microfinance products to tap into India’s vast consumer base.
The transformation has been driven by the government’s digitisation initiatives, which have turned a once largely cash-based economy into a vibrant fintech ecosystem. Each digital transaction now generates valuable data that allows lenders to assess creditworthiness, paving the way for microloans, insurance, and tailored savings products for underserved populations.
To address account inactivity, Indian fintech leaders like Paytm and PhonePe are developing targeted products for low-income users, using the Unified Payments Interface (UPI) and alternative data — including mobile usage patterns — to enhance financial inclusion.
The report emphasized that India’s approach offers critical lessons for African nations: prioritize digital infrastructure, reduce account dormancy through innovation, and turn demographic size into an economic advantage.
Citing India’s record FDI inflows exceeding $50 billion in 2024–25, Sunday Independent concluded that inclusive digitisation not only boosts financial participation but also strengthens investor confidence and sustainable growth.
