Indians will be data rich before they’re economically rich, said Nandan Nilekani

• Infosys Chairman Nandan Nilekani believes Indians will be data rich before they will be economically rich.
  
• This will lead to new business models like flow based lending.
  
• Flow-based lending will allow small businesses to access small and short-term working capital loans.
  

More and more Indians are coming online as Internet penetration and connectivity improves in the country.

"Indians will be data rich before they will be economically rich," stated Nandan Nilekani, the chairman of Infosys at the India Economic Summit in New Delhi.

He explained that data being leveraged in India is very different to how it is leveraged in the West. People were online 10 -15 years earlier and their data flowed without any restrictions.

In India, the online ad market is still only at $2 billion and people are very aware of how and where their data is going.

Even so, as data increases, it will bring about new business models — like flow-based lending. Chairman of Wipro, Rishad Premji, feels that big data can be harnessed and that India has only "scratched the surface," of new technologies.

Credit will follow the data

"Historically, lending in India has been to big guys in large amounts for a long time for assets. A lot of challenges we have today are because of that," stated Nilekani.

The boom in data can be a boon for small businesses. Flow-based lending means that small businesses will be able to raise small, short-term working capital loans.

In cash flow lending, companies are allowed to borrow money based on the projected future cash flows.

"So, millions of businesses that don’t have access to credit today will get access," he said.

Around seven to eight businesses have in-principle approval from the RBI for account aggregation and 30-40 startups working on flow based lending. Even big banks are showing interest in this model.

"Credit will be first example of data being empowered for users," said Nilekani.