Open Credit Enablement Network to democratise credit: Nilekeni

By Priyanka Pani

Nandan Nilekani, founding architect of Aadhaar and co-founder and non-executive chairman of Infosys Ltd, said that work is on for a system that will enable lenders from India to borrowers through various marketplaces to democratise credit for small businesses.

Speaking at the recently concluded and world’s first virtual FinTech event –Global FinTech Fest, Nilekani said that the system called Open Credit Enablement Network would resolve issues related to credit and ensure the revival of the economy, which has been hit by the ongoing covid-19 pandemic.

Open Credit Enablement Network (OCEN), a system that enables to connect lenders to marketplaces and thereby to borrowers is a technology system, is currently under discussion, he added.

”…democratising credit in India is the need of the hour.India needs to kick-start consumption, offer credit a larger role whilst lubricating small businesses with capital, ” Nilekani – Co-founder and Non-Executive Chairman of the Board, Infosys said at the two-day virtual fest organised by National Payments Corporation of India (NPCI), FinTech Convergence Council (FCC) and Payments Council of India (PCI).

Speaking at the event, Amitabh Kant, CEO, NITI Aayog said the future of lending will be Phygital and it will be the next big driver in fintech, driven by retail loans. Digital lending will constitute 50% of total lending by 2023, Kant added.

”India needs to go that extra mile in offering credit to the most deserving, smallest businesses and individuals. With most credit directed to large companies in large volumes, smaller companies and micro enterprises are left in the lurch with little or no access to credit at all which is a huge concern for the next growth phase of the industry, ” he further stated.

Kant also suggested that as with the cost of lending being too high, small value loans become unfeasible,  account aggregator service protocols developed and backed by RBI can be the game changer. While it can be implemented across fintech firms like wealth management, broking and banking, he highlighted the fact that the latter, most importantly and immediately, needs to be implemented in lending so the well-deserving smaller and micro businesses are able to opt for loans.

Citing the examples of home-grown innovations such as – UPI and AEPS, he highlighted the fact that there is a need to realise that public systems need to be designed keeping in mind not just the top 50 million users but the 1 billion users, the masses.

Naveen Surya, Chairman, FinTech Convergence Council said “India, currently, is a very fertile ground for the progression of collaborations between banks and fintech, accelerating the growth of nascent sectors like – neo-banking and digital lending. The role of non-banks in growth of UPI, BBPS and PPI has been sizeable. With low-cost, high-volume transactions across payment technology, digital banking and lending, fintech has helped serve millions in a way that the legacy systems couldn’t. Aadhaar KYC and video-KYC is the future and will pick up pace extensively in the near term.”