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AI can cut MSME underwriting to minutes, but credit decisions still need human oversight: NBFC leaders

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AI can cut MSME underwriting to minutes, but credit decisions still need human oversight: NBFC leaders

AI can cut MSME underwriting to minutes, but credit decisions still need human oversight: NBFC leaders

AI is helping NBFCs structure unorganised business records and speed up SME underwriting, but data quality, diverse business models and repayment risks continue to limit fully automated lending, industry leaders said at the ETBFSI NBFC Leaders’ Retreat 2026.

Artificial intelligence can help NBFCs expand credit access to small businesses by converting fragmented financial records into usable credit insights, but human judgment remains essential to assessing repayment capacity, industry leaders said. Speaking at the ETBFSI NBFC Leaders’ Retreat 2026, Jyothirlatha B, CTO & CIO, Godrej Capital; Naved Hussain, Head IT & BSG, Tyger Capital; and Raman Aggarwal, CEO, FIDC, discussed how AI is changing SME underwriting while highlighting the challenges of data reliability and diverse borrower profiles. AI speeds up assessment of unstructured data Jyothirlatha said AI could help underwriters analyse fragmented business records, identify transaction patterns and improve the consistency of credit assessments. However, fully automated decision-making remains difficult when financial information is incomplete or unreliable. Advt

“Whether we are able to do complete decisioning using that, it is still a no. It is a co-pilot kind of thing,” she said, stressing the need for verification and human oversight. Hussain said AI was helping Tyger Capital convert handwritten records and other unstructured information into usable financial data. Tasks that once took credit managers days, such as structuring a small merchant’s records into a balance sheet, could now be completed in minutes. This could allow underwriters to spend more time assessing repayment capacity and structuring loans rather than manually processing documents.


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