New Delh: Foreign investors are increasingly flocking to India’s financial sector as the country transforms a large population of previously unbanked individuals into a data-rich market, a recent report said, urging Africa to pursue the same model.

Despite challenges from external trade headwinds and widespread account dormancy, the FDI influx suggests confidence in India's digitally-driven transformation, where its huge population is harnessed as a scalable market through innovative policies and fintech ecosystems, the report from Sunday Independent said.

The report also noted an internal contradiction of nearly 89 per cent adult account penetration against 25 per cent account dormancy rates. Despite this dormancy rate, investors like Citigroup, Barclays, and Japan’s MUFG are expanding through data-driven credit scoring and micro-products into the Indian market.

The core driver is India’s shift from an informal, cash-based economy where the government’s digitisation initiatives have created a fintech ecosystem that unlocks value from previously invisible populations, the report noted.

Every transaction generates data that allows lenders to assess creditworthiness, enabling offerings like microloans, insurance, and savings products to a new consumer base. Investors like Citigroup and Barclays aim to gain access to this scalable market of 1.4 billion people, the report said.