The Reserve Bank of India (RBI) and the Government of India (GoI) have highlighted a central challenge in advancing financial inclusion: the heavy reliance on credit bureau reports for first-time borrowers. Young individuals, micro, small and medium enterprises (MSMEs), and small entrepreneurs often find themselves at a disadvantage in a system that insists on prior credit history before granting loans. Regulators have therefore advised that such reports should not serve as the sole criterion for extending credit to New-to-Credit (NTC) customers.

According to TransUnion CIBIL’s latest Consumer Market Insights (CMI) report, 41 per cent of first-time borrowers today are from Generation Z, underlining the growing influx of new entrants into the credit market. For lenders, this presents both

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