New Delhi, May 13 -- Artificial Intelligence (AI)-powered lending models could help unlock an estimated USD 130-170 billion credit gap for India's MSMEs by using digital payment trails, GST filings and utility bill data instead of relying only on traditional credit scores, according to a PIB release on Wednesday.

The release said AI-based credit systems are reshaping India's lending ecosystem by expanding access to formal credit for "MSMEs, informal workers, and first-time borrowers" who often lack conventional credit histories.

"AI-powered solutions move beyond conventional credit scoring models and leverage alternative data such as digital payment transactions, GST filings, bank statements, and utility payments to assess creditworthin...