Krishnamurthy Subramanian, Executive Director of the International Monetary Fund (IMF), has said that artificial intelligence can come in handy in increasing private credit, which would help in realising the entrepreneurial dreams of people.
“The source provides a transcript that discusses the potential of AI in India, with a focus on enabling talent and improving the financial sector, healthcare, and education. It emphasises solving India’s problems at scale and Indian price points.
“There is an opportunity to increase private credit to GDP in India, which is currently at 58 per cent compared to the global average of 150 per cent. AI can play a significant role in providing credit to individuals and firms, especially in the service sector where physical collateral is limited,” Subramanian, who was also the former Chief Economic Advisor to the Government of India, said.
Delivering the keynote on the impact of AI on the economy at the Hyderabad Software Enterprises Association (HYSEA)’s annual conference here on Tuesday, he said that ‘cash flow-based lending, enabled by digital payments, can be used to assess credit risk for borrowers outside the formal financial system.
For example, a coffee or tea seller can show their digital payment data to secure a loan from banks.
He said that AI can also be used in health care and education. In education, it can help in remedial education by tailoring it to individual student needs and assessing their skill levels in areas like arithmetic and algebra.
He said India is expected to be a $50-plus trillion economy by 2047, requiring entrepreneurs to seize opportunities and contribute to the nation’s growth.
He asked entrepreneurs to focus on solving India’s problems at India scale and at Indian price points.