Embedded finance is reshaping digital lending in India

What if taking a loan became as effortless as adding an item to your cart or booking a cab? For millions of Indians, that future is already here. Embedded finance is no longer a buzzword tucked away in fintech companies, its right here unfolding across apps we use every day.

From e-commerce checkouts and ride-hailing services, to online learning platforms and ERP tools, credit is being offered, not through banks or branches, but, within digital experiences that we trust and use regularly.

It’s a shift that’s reshaping how Indians interact with money—making borrowing faster, smarter, and deeply contextual. Embedded finance, at its core, is about seamlessly integrating financial services like loans, payments, and insurance into non-financial platforms. Instead of applying for a loan at a bank, users are presented with pre-approved credit options the moment they actually need them—when making a purchase, planning a trip, or upgrading their work tools. Its finance made invisible, yet intelligent—intuitive, instant, and designed to serve people in the flow of life.

India, with its mobile-savvy consumers and digital infrastructure like UPI and Aadhar, is perfectly positioned to lead this transformation. According to Research and Markets, the embedded finance market is projected to touch $28.6 billion by 2029. But, this isn’t just about numbers—it’s about access. Traditional lending has long favoured the few: those with strong credit histories, stable income, or the time to navigate cumbersome processes. Embedded lending flips that approach, from a one-size-fits-all service into a personalised, moment-driven offering that meets users where they are, both, literally and digitally.

The real magic lies in how embedded lending harnesses data and technology to make real-time decisions. APIs, machine learning models, and behaviour analytics work behind the scenes to offer credit options tailored to each user. A student applying for an online course might see pre-approved education loans.

A cab driver could access daily payouts or insurance products. For users, it’s seamless. For businesses, it’s an opportunity to build stickier relationships. And for lenders, it’s a way to assess and serve previously unreachable segments.

Behind this shift is a growing ecosystem of fintech enablers. These players build modular lending infrastructure that plugs directly into consumer-facing platforms—offering tools for underwriting, digital KYC, data consent, and instant disbursals. Their plug-and-play APIs allow even non-financial brands to offer credit experiences without becoming lenders themselves. Think of it as adding a credit layer to your app in weeks, not months.

With the power to personalise lending based on purchase behaviour, transaction history, or app usage, the potential is massive!

We’re already seeing a burst of use cases. Buy Now, Pay Later options are popping up across travel and e-commerce platforms, especially appealing to younger consumers who value flexibility. Small merchants are getting invoice financing based on their online sales patterns. Gig economy workers are accessing daily wage advances or loans through their aggregator apps. Even sectors like education and mobility are being transformed—users can now pay in EMIs for courses, rides, or fuel, with minimal friction and maximum relevance.

Regulators keeping pace
Regulators, too, are keeping pace. The Reserve Bank of India has introduced guidelines to ensure digital lending is not just fast, but fair. By placing responsibility on regulated entities and insisting on clear disclosures and consent-based processes, the RBI is building the guardrails for a system that balances innovation with consumer protection.

What lies ahead is an even more embedded future—one where lending follows the user, not the other way around. As AI deepens personalization, blockchain strengthens identity and data security, and partnerships evolve across sectors, lending will become more ambient and more human.

The winners will be those who don’t just embed credit into their platforms, but embed trust, relevance, and responsibility into their customer experience.

In India’s digital-first future, embedded lending isn’t just a feature—it’s becoming the foundation of how credit is discovered, delivered, and experienced. And it’s only just getting started.

-- Sandeep Kadam, CTO, Kissht.