In India, many people from the informal and self employed sectors, as well as gig workers, do not have traditional, documented proof of income
• Self-employed and informal sector: This includes a large number of professionals, small business owners, freelancers, and daily wage earners who do not receive a standardized monthly salary slip.
• Irregular income: Many individuals, such as gig workers and farmers, have seasonal or inconsistent income streams that are not easily documented by formal pay slips.
• Cash-based transactions: A significant portion of the informal economy operates on cash transactions, which are often not recorded in official bank accounts or other formal channels.
• Un- Organized income: Individuals and families with incomes below the taxable threshold may not file ITRs, which are a key document for proving income.
A 2024 TransUnion CIBIL study found that approximately 480 million adult Indians were "credit unserved". This population lacks any formal credit history, which makes it nearly impossible for them to get a loan from formal lenders like banks, regardless of their financial behavior.
An additional 164 million Indians are considered "credit underserved.
here is what the data from credit bureaus show:
15% have scores below 700: According to a 2019 report by , 15% of
borrowers taking consumer loans had a credit score below 700.
Scores below 550 are "poor": Both CIBIL and CRIF High Mark
01.
classify scores below 550 as "poor" or "very low," indicating a
damaged credit history and a low chance of loan approval.
Experian uses a similar classification, with scores below 600
indicating a need for "immediate action".
02. Only a portion have high scores: A 2025 report shows that only 25% of salaried consumers and 14% of self-employed consumers have an "excellent" credit score of 770 or higher
1. Financial Factors
❖Low Credit Score
❖High Debt-to-Income Ratio
❖Insufficient / Unstable Income
❖Excessive Existing Loan Obligations
❖Poor Banking Habits
2. Employment Factors:
❖Unstable Employment:
❖Employer Profile
❖Uncertain Income in Self-Employed
Individuals
While financial institutions in India have historically underserved lower-income individuals and those in the informal economy,
Seven Hills has introduced new, more flexible solutions for accessing mortgage-related financing. we achieve this by leveraging technology, alternative data for credit assessment, and specialized products that meet the unique needs of these borrowers
➢Alternative credit scoring
➢Government schemes and initiatives
➢Affordable Repayment
➢Co-lending partnerships
