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International Journal of Advanced Research in Education and TechnologY(IJARETY)
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Article

TITLE Beyond Digital Access: Embedded Finance and the Changing Landscape of Financial Inclusion in India
ABSTRACT A decade of state-led digital infrastructure building has given India something close to universal formal-account access, yet the harder question of whether that access has become genuine financial inclusion is now being answered less by government infrastructure than by the private embedded finance layered on top of it. This paper departs from the conventional practice of reviewing embedded finance product-by-product, and instead proposes a three-mechanism framework reach, inference, and legitimacy through which embedded payments, lending, Buy Now Pay Later, insurance, and Banking-as-a-Service convert digital presence into usable financial capability for Indian households and micro, small, and medium enterprises. Reach describes the distributional advantage of attaching a financial product to a high-frequency non-financial touchpoint; inference describes the use of platform-observed behavioural data to underwrite risk beyond what credit bureaux can see; and legitimacy describes the transfer of trust from an established platform to an unfamiliar financial product. Applying this framework to literature published between 2015 and 2026, and to institutional evidence from the Reserve Bank of India, the National Payments Corporation of India, the Small Industries Development Bank of India, NITI Aayog, and multilateral bodies, the paper shows that each mechanism performs unevenly across India's embedded finance verticals and that each carries a specific, under-researched failure mode: reach without retention in payments, inference without recourse in lending and Buy Now Pay Later, and legitimacy without literacy in insurance and neobanking. The paper argues that India's Unified Payments Interface, Jan Dhan-Aadhaar-Mobile trinity, and Account Aggregator framework have solved the reach problem at a scale with few global precedents, but that inference and legitimacy remain comparatively unbuilt, and it closes by specifying the empirical designs needed to test where each mechanism is, and is not, delivering inclusion rather than mere access.
AUTHOR Showmiya S Assistant Professor, School of Management Science, Sri Krishna Knowledge Foundation, Coimbatore, India
VOLUME 13
DOI DOI:10.15680/IJARETY.2026.1305004
PDF 4_Beyond Digital Access Embedded Finance and the Changing Landscape of Financial Inclusion in India.pdf
KEYWORDS
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