Bankers pitch for new lending models based on cash flows, alternative data for gig workers

Bankers on Wednesday called for new lending models based on cash flows and alternative data to extend formal credit to gig workers.

This will help overcome the handicap of traditional underwriting models centred on fixed monthly salaries, which are unable to adequately capture their repayment capacity, they said.

Speaking at the Global Fintech Fest 2026, bankers said gig workers have volatile incomes, but possess the ability and discipline to repay loans, and stressed the need for digital, flexible, and technology-driven lending products tailored to their earnings patterns.

"A gig worker does not have a salary, but they have an income. A gig worker does not get a salary on a particular day. They don't have a payday, but they do have cash flows," Ratan Kesh, executive director and chief operating officer of Bandhan Bank, said, adding that lenders need to assess the borrower's ability to repay rather than merely focus on building a lending book.

He said lenders need a "dynamic, AI-enabled, cash flow-based underwriting architecture, which looks at probabilistic risk models and behaviour-led risk-adjusted pricing".

He also said traditional underwriting models generally assume a salary that comes on a fixed date, whereas gig workers receive income at different intervals.

"Traditional underwriting models generally operate with a salary which comes on the 30th of the month. Gig workers don't get paid on the 30th. They get paid when some of us are hungry, some of us are stuck in traffic," he said.

Another banker said banks need to create completely new products for gig workers instead of merely modifying existing credit scorecards.

"Scorecard changing is not the criteria... You've got to create a completely new product line," another banker said, comparing the income pattern of a salaried worker with a straight-line heartbeat and that of a gig worker with an ECG, where "there will be that volatility".

He also advocated flexible repayment structures, saying lenders should keep a "minimum obligation" instead of imposing a standard weekly, daily or monthly repayment.

"One is the durability of the income. Whether they are all year throughout... whether they are able to earn. This one point is very important to know about the source of income," a banker said.

"The alternative data, as I was told, the utility bill payments, other transactions in the account. These additional data points are very, very important while assessing the credit limit for the income bankable," the banker said.

The banker also suggested embedded repayments linked to incoming earnings, under which a portion of the worker's income could automatically go towards loan repayment.

"Whenever the credits are coming, there will be an amount going towards the repayment of the loan," he said, adding that if the monthly obligation is fulfilled, the system should stop deducting further instalments until the next cycle.

The panel also highlighted the importance of digital delivery as gig workers often do not have the time or inclination to visit bank branches.