Part 2/12:

The speaker began by clarifying foundational concepts—credit as borrowing money from formal or informal sources, and credit assessment as the intricate evaluation process conducted by formal institutions using models like CIBIL scores. Informal sources, however, largely rely on contact scraping and behavioral data rather than formal evaluation metrics.

From a macro perspective, positive trends are emerging: Non-Performing Assets (NPAs) have decreased from double digits in 2018 to single digits, indicating a healthier credit environment. Yet, a persistent issue is the large proportion of rural and economically backward urban populations still dependent on informal credit sources—a situation that hampers financial inclusion and overall economic growth.