Digital payment records and business transaction data are helping lenders extend credit to small businesses that have historically struggled to qualify for bank loans, as governments, financial institutions and fintech companies seek to make digitalisation a tool for expanding access to finance.
India’s experience shows how payment infrastructure can create financial records for businesses operating outside traditional banking systems. Anantha Nageswaran, the Indian government’s Chief Economic Adviser, told a panel at the 2026 World Bank Group and International Monetary Fund (IMF) Annual Meetings that three developments have been particularly important: the Goods and Services Tax, the Unified Payments Interface and a system known as account aggregation.
The introduction of GST encouraged smaller businesses to formalise because larger buyers increasingly required them to operate within the formal tax system, Nageswaran said. Digital payments then created transaction histories that lenders could use to assess cash flows, while account aggregators enabled financial information to move between institutions with customers’ permission.
The combination is helping lenders assess businesses based on their economic activity rather than relying exclusively on property, established banking relationships or previous borrowing records.
“UPI, as he put it very beautifully in his initial remarks, made data the new collateral,” Nageswaran said, referring to World Bank Group President Ajay Banga’s argument that digital transaction records can help make small businesses more visible to lenders.
The model is also gaining traction outside India. David Arana, chief executive officer of Mexican fintech Konfío, said 84% of the businesses his company has historically financed were receiving their first business loan. He said the company uses digital information, sales records and electronic invoicing to assess firms that may not meet the requirements imposed by traditional lenders.
Konfío has become Mexico’s third-largest player in small-business lending by number of borrowers, compared with Mexican banks, Arana said. The company’s experience suggests that digital underwriting can help lenders reach businesses that conventional credit assessment methods leave underserved.
Thailand offers another example. Kattiya Indaravijaya, chief executive officer of KASIKORNBANK, said QR-code payments have created digital footprints for millions of small businesses, generating financial histories that can support credit assessments.
However, she said many businesses still mix personal and business transactions, while some continue to rely on cash. That limits the quality of the information available to lenders and makes broader data-sharing arrangements important.
KASIKORNBANK is working with fintech companies and supporting wider data access through initiatives involving the Bank of Thailand, Indaravijaya said. She cited KLINE, a joint venture with LINE Financial (Asia), as an example of collaboration between traditional banking and financial technology.
Kell Jay Lim, Grab’s head of financial services, said digital platforms can also provide lenders with information from commercial activity that takes place outside conventional banking channels. Grab processes about 15 million transactions a day and collects roughly 500 terabytes of raw data daily, he said.
That information can help the company understand merchants and delivery partners using its platform, while its services include cashless payments and financing for small businesses.
The next challenge is making the data available and useful across institutions and borders. Panellists called for stronger data-sharing systems, comparable reporting standards and regulatory frameworks that allow lenders to use digital information while maintaining appropriate safeguards.
For small businesses, the potential benefit is practical, transaction histories can help demonstrate their ability to repay loans even when they do not own property or have an extensive credit history. For lenders, the approach offers a way to assess more borrowers using evidence of actual commercial activity.
The discussion also underscored that digital records alone will not resolve every financing constraint. Nageswaran said governments must also address delayed payments to small suppliers, excessive compliance requirements and gaps in entrepreneurs’ financial and management skills.
The panel’s central message was that digitalisation can improve access to credit, but its impact depends on whether governments and financial institutions build systems that allow business data to be shared, verified and translated into lending decisions.
