Speaking at the Global Fintech Festival, 2020 Nilekani, co-founder and non-executive chairman of Infosys Ltd, described the initiative as a credit protocol infrastructure called the Open Credit Enablement Network, or OCEN, built by Indian Software Product Industry Roundtable (iSPIRT), a software industry think tank.

Under these new lines of credit, OCEN will act as a common language, connecting lenders and markets to use and create innovative financial credit products at scale.

Account aggregators will use this platform to integrate credit offerings into their apps, which in turn will play a crucial role in democratizing access to credit and lowering interest rates for borrowers.

iSpirt is in partnership with State Bank of India, HDFC Bank Ltd, ICICI Bank Ltd, IDFC First Bank Ltd, Axis Bank Ltd and Bajaj Finserv Ltd for this new credit rail.

“Besides digitizing the lending process, we have data stores through the Account Aggregation (AA) Network, and for credit to move seamlessly to small businesses, lenders will need to have a common protocol. Just like what UPI has done with the payments, ”Nilekani said.

“We are working on a common language for lenders and borrowers, called the Open Credit Enablement Network protocol, which will have a huge impact in enabling small businesses to obtain loans.”

Nilekani introduced the AA platform a year ago, a digital public infrastructure developed with India’s leading financial regulators, as a tool to manage data on behalf of consumers and streamline access to payment service providers. and financial.

“Blue collar-focused lenders want to resolve the asymmetry of costs and data. The cost is solved by digitization and the asymmetry is solved by the aggregator model of accounts. Now the Credit Memorandum (OCEN) will democratize the process for millions of small businesses. For our economy to pick up, we need to finance small businesses, ”Nilekani said at the virtual event.

He said that many of the micro-enterprises that form the industrial backbone of India do not have access to credit, with much of India’s loan capital still going to large companies.

This is despite the digitalization of the credit economy in India, which now allows for shorter duration and low cost loans, thus reducing the cost of new credit disbursements.

“Small businesses don’t get loans because there is no data around them and AA contributes to data asymmetry. Data is important and is reflected in the various activities of the company. For eg. GST data on a merchant’s billing can be used by small businesses to obtain a loan or data on markets like GeM (Government Electronic Marketplace), which can be used to track a merchant’s billing. in order to grant a loan, ”he said.

He also said that when public systems are developed, you have to think about how a billion Indians can participate in infrastructure. “We need to get a billion people involved in the public infrastructure that we are developing, and have a solution for everyone and be inclusive when we think about it. “