New Delhi, June 30 -- India's microfinance institutions are expanding the use of artificial intelligence across customer calls, cybersecurity and internal operations as lenders look to improve efficiency, reduce costs and strengthen risk management, according to executives.

The adoption marks a shift from experimental deployments to operational use cases, although firms remain cautious about applying AI to lending decisions, where much of the assessment still relies on field verification and human judgment.

While lenders are increasingly buying AI capabilities, some are avoiding software-as-a-service (SaaS) models for customer-facing applications, preferring to host AI models within their own infrastructure to retain control over sensit...