India’s unsecured lending market is moving towards a more digital and data-driven model, but the next phase of growth is likely to be defined as much by responsible underwriting as by faster access to credit. For salaried professionals, changing spending patterns and short-term liquidity needs are creating demand for convenient formal credit, while lenders face growing pressure to assess repayment capacity, manage over-leveraging risks and meet tighter regulatory expectations. In this conversation with Tech Achieve Media, Suresh Kumar, CEO, Emergency Paisa, discusses the changing unsecured lending landscape, the role of AI in credit assessment, emerging opportunities in Tier-2 and Tier-3 markets, and the need to balance digital convenience with credit discipline.
TAM: With rapid digitization, where do you see unsecured personal lending evolving in India?
Suresh Kumar: India’s unsecured lending landscape is evolving into a more digital, data-driven, and personalized model. Consumers today expect financial services to be as convenient as the other digital services they use every day quick, transparent, and accessible from their smartphones. However, the next phase of growth will not simply be about faster disbursals. It will be about responsible access to credit. Technology can help lenders assess a borrower more holistically, understand repayment capacity better, and offer credit that is appropriate to the individual’s financial profile. I believe the future of unsecured lending will therefore be a balance between convenience and responsibility, where better technology enables wider access without compromising credit discipline.
Also read: How Intelligent Algorithms Are Replacing Rule-Based Lending
TAM: How are changing consumer credit behaviors impacting short-term liquidity management for salaried professionals?
Suresh Kumar: Salaried professionals today have more predictable incomes, but their expenses are becoming increasingly dynamic. Rent, EMIs, healthcare, travel, education, lifestyle expenses, and unexpected obligations can sometimes create temporary liquidity gaps even for financially stable individuals. We are seeing consumers become more comfortable using formal digital credit as a bridge for such short-term requirements. At the same time, borrowers are becoming more conscious about repayment schedules, costs, and their overall credit profile. From a lender’s perspective, this trend makes responsible underwriting even more important. The objective should be to identify genuine short-term liquidity needs and ensure that the credit offered remains aligned with the borrower’s repayment capacity.
TAM: What specific guardrails can prevent AI-driven credit assessment from leading to over-leveraging among high-risk borrowers?
Suresh Kumar: AI should assist responsible lending, not simply maximize approvals. One of the most important guardrails is to look beyond an individual loan application and assess the borrower’s overall repayment capacity and existing obligations. Models should incorporate factors such as existing credit exposure, repayment behavior, income stability, and affordability indicators. There should also be clear thresholds beyond which additional credit is restricted or declined. Equally important are human oversight, regular model validation, explainability, and continuous monitoring of portfolio performance. AI should be designed to recognize when not to lend. That is just as important as identifying when a borrower is eligible for credit.
TAM: How does EmergencyPaisa’s proprietary AI model differentiate its risk-pricing approach from traditional credit bureaus?
Suresh Kumar: Credit bureaus play an important role in lending, but they primarily provide a view of a borrower’s existing credit history. An AI-led lending model can complement that information by analyzing a broader set of relevant indicators available within the lender’s permissible data framework. At EmergencyPaisa, our approach is focused on combining multiple signals to understand a borrower’s profile, repayment capacity, and risk more dynamically rather than relying on a single score.
The objective is not to replace bureau information, but to use technology alongside it to make a more informed lending decision. This can help us differentiate between borrowers with different levels of risk and make credit decisions that are more closely aligned with their individual profiles.
TAM: Having crossed 10,000 disbursements across 50+ cities, what are the key credit gaps in Tier-2 and Tier-3 markets that traditional banks continue to miss?
Suresh Kumar: Our experience across 50+ cities has shown us that the need for formal credit is not limited to large metropolitan centers. In Tier-2 and Tier-3 markets, many salaried and digitally active consumers have regular incomes and genuine short-term financial requirements but may not always fit neatly into traditional lending processes.
One of the gaps is accessibility. Physical branch networks and conventional documentation-heavy processes can make smaller-ticket credit less convenient for these consumers. Digital lending can help bridge that gap by making the application and assessment process more accessible. But accessibility must be paired with responsible underwriting. The opportunity is not simply to lend more, but to bring more underserved consumers into a formal and transparent credit ecosystem.
TAM: How do you address concerns that instant, collateral-free credit apps may encourage impulse borrowing among young salaried professionals?
It is a valid concern, and the digital lending industry has a responsibility to address it. Convenience should never become a reason for someone to borrow without understanding their repayment obligation. At EmergencyPaisa, we believe responsible lending starts with responsible underwriting. Credit eligibility should be based on the borrower’s financial profile and repayment capacity rather than simply the desire to maximize disbursals. Clear communication around loan terms, transparent pricing, repayment schedules, and responsible credit limits are equally important. The larger objective should be to make digital credit a useful financial tool for genuine needs, not encourage unnecessary borrowing.
TAM: As the RBI continues to strengthen oversight of digital lending, how is EmergencyPaisa balancing growth with strict compliance?
Suresh Kumar: For us, compliance is not something that comes after growth, it is part of the foundation on which we build growth. As the regulatory environment around digital lending evolves, we continue to focus on areas such as transparent customer communication, appropriate disclosures, responsible underwriting, data protection, and working within the applicable regulatory framework and partner requirements. The digital lending sector can grow sustainably only when customer trust grows alongside it. Our approach is therefore to build technology and processes that support both operational efficiency and regulatory discipline. In the long run, responsible growth is much more valuable than growth achieved at the cost of customer trust.
