OCEN receives Digidhan 2021-22 award for Special Contribution to promotion of Digital Payments

We are thrilled to announce that Open Credit Enablement Network (OCEN) has been conferred with the prestigious Digidhan 2021-22 award for their Special contribution to the promotion of Digital Payments. The award ceremony was held recently in New Delhi, organized by the Ministry of IT and Electronics, and was handed over to Sagar Parikh, the OCEN lead at iSPIRT, by the Honourable Union Minister, Mr Ashwini Vaishnav.

The Digidhan Awards recognize and celebrate the outstanding contributions made by individuals and organizations towards promoting and adopting digital payments in India. This year, the award was presented to OCEN for their revolutionary work in creating a standardized digital credit infrastructure that enables lending institutions to access and disburse loans digitally.

OCEN‘s platform acts as a bridge between lenders, borrowers, and other credit infrastructure providers, enabling them to interact with each other in a secure, reliable, and efficient manner. With OCEN, borrowers can easily access credit from multiple lenders, while lenders can easily verify the borrower’s identity, creditworthiness, and other relevant details before disbursing the loan.

The platform’s open architecture and standard APIs make integrating with OCEN easy for other credit infrastructure providers, creating a robust credit ecosystem that benefits all stakeholders. Moreover, OCEN’s platform ensures that all transactions are secure, compliant with regulatory requirements, and protect user privacy.

Speaking at the event, Sagar Parikh said, “We are honoured to receive the Digidhan award for our contribution to the promotion of digital payments. At OCEN, we believe that access to credit is a fundamental right, and our platform is designed to ensure that every Indian can access credit securely and efficiently. We are grateful for this recognition and will continue to work towards our mission of financial inclusion for all.”

The Digidhan award is a testament to OCEN’s commitment to promoting financial inclusion and enabling digital transformation in India’s credit ecosystem. The platform’s standardized infrastructure and open architecture have the potential to revolutionize the lending landscape in India, making it easier for borrowers to access credit and for lenders to disburse loans.

iSPIRT Fourth Open House on OCEN: Market Opportunities

On 14th August we hosted the fourth open house session on Open Credit Enablement Network (OCEN). This week’s discussion focused on the different roles and market opportunities for ecosystem participants across the lending value chain.

To recap, OCEN (O-Ken) is a new paradigm for credit that seeks to provide a common language for lenders and marketplaces to build innovative, financial credit products at scale.

In last week’s session, we did a deep dive into the underlying OCEN API flows, covering different entity interactions in-depth and addressing common technical queries. 

We began by highlighting the shift from balance sheet based lending to cash flow based lending that will be enabled by OCEN adoption. This upgraded methodology gives lenders a more holistic way to assess the creditworthiness of potential borrowers while allowing for more innovation in the kinds of products that can be offered to individuals and MSMEs.

OCEN is built around the idea that any service provider that interfaces with consumers and MSMEs can become a Fintech-enabled credit marketplace i.e. a Loan Service Provider. A key component to the success of this approach is that data from these digital platforms will reduce the information asymmetry between borrower and lender

There is room for entities to play the role of Derived Data Providers by digesting this data (after obtaining user consent) and helping to inform the lender’s credit rules. Working alongside specialised Underwriting Modellers, these players can map the best the fit between lender and borrower, making for smarter underwriting. 

OCEN is designed to enable many types of LSPs offering diverse ‘species’ of credit products. While the last three sessions have focused on MSME credit, this week our volunteers covered several use cases for individual consumers and service professionals. Principally these resemble the ‘Type 4’ loan products highlighted in earlier sessions where the end use for the loan is defined, and the repayment is locked into incoming cash flows.

Through the past few weeks one of our objectives has been to illuminate the range of opportunities for participants (both new and incumbent) to get involved in an OCEN-enabled lending process. Entities can provide value by bringing superior distribution, data, technology, or capital into the equation. 

LSPs have an important role to play as ‘agents of the borrower’. Technology Service Providers (TSP) need to work with lenders, LSPs or both, helping them to successfully come onboard the OCEN protocol. Account Aggregators play the role of data fiduciaries, facilitating the consented sharing of financial information in real time. Payment Service Providers (PSP) provide a ready infrastructure for both the disbursement of loans and collection of repayments.

Even incumbent fintech lending marketplaces that have a ‘deep, tacit know-how of the lending domain’ can play multiple roles in the cash flow based lending value chain.

Finally, our volunteers talked about CredAll, which is a collective of lending ecosystem players to drive cash flow based lending. Participants interested in becoming an OCEN-enabled Lender or LSP can have a look through the suggested checklist and basic requirements for each.

The fourth session on OCEN covered the following topics broadly, and the entire webinar is also available on our official Youtube channel:

  • By Siddharth Shetty
    • An introduction to iSPIRT and our values
  • By Nipun Kohli
    • New cash flow based lending paradigm
    • Derived data providers
    • How DDPs and Underwriting Modellers can help assess the creditworthiness of potential borrowers
    • Types of lending products enabled by OCEN
    • Product example 1 (Consumer finance use cases like paying school fees or streaming charges)
    • Product example 2 (For service professionals)
  • By Ankit Singh
    • Opportunities for different stakeholders at various stages in the credit lifecycle
    • Different ways entities can add value
    • How an LSP is different from a DSA
    • 5 D’s of value addition for LSPs
    • The role of Technical Service Providers (TSP), Account Aggregators (AA), and Payment Services Providers (PSP)
    • OCEN opportunity for incumbent fintech lending players
    • How to become an OCEN-enabled lender or LSP

After the presentation, our volunteers answered some questions from the community including:

  • How to think about constructing the right business models for LSPs and lenders?
  • Does a DDP always have to be an LSP?
  • What are the opportunities for existing fintech players?
  • What are the KYC implications for OCEN?

As always, in order to successfully create a new credit ecosystem for Bharat it will take the collaborative effort of participants from every corner of our fintech ecosystem.

If you’re interested in participating as a:

  • Loan Service Provider
  • Lender
  • Technology Service Provider

please drop us an email at [email protected]

Readers may also submit any questions about the OCEN to the same email address and our anchor volunteers shall try their best to answer these questions during next open house discussion (P.S: Time and Date is yet to be decided)

If you would like to know more about becoming an LSP, please check out www.credall.org (CredAll is a collective of lending ecosystem players to drive cash flow based lending)

Recommended Reading:

Chapter 7 and 8 in RBI UK Sinha MSME committee report: https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=924

Introduction to India Stack’s fourth layer – Data Empowerment & Protection Architecture: https://www.youtube.com/watch?v=mW__azI8_ow

iSPIRT Third Open House on OCEN: API Specifications & Next Steps

On 7th August we hosted the third open house discussion on Open Credit Enablement Network (OCEN). This week’s session featured a deep dive into the underlying OCEN API flows, covering different entity interactions in-depth and addressing common technical queries. 

To recap, OCEN (O-Ken) is a new paradigm for credit that seeks to provide a common language for lenders and marketplaces to build innovative, financial credit products at scale. In last week’s session, we shed light on several potential Loan Service Provider (LSP) products and business cases. We also talked about the various opportunities for ecosystem participants across an OCEN-enabled cash flow lending value chain.

This week we dove into the API flows that make up the standardised end-to-end process of applying for a loan via an LSP, also illustrating how Account Aggregators will fit into this reimagined value chain. Our volunteers also covered the role of CredAll which is a collective of lending ecosystem players to drive cash flow based lending. 

The third session on OCEN covered the following topics broadly, and the entire webinar is also available on our official Youtube channel:

  • By Siddharth Shetty
    • An introduction to iSPIRT and our values
  • By Ankit Singh
    • Recap of what OCEN is, and how LSPs fit in to the framework
    • Query 1: Is OCEN aggregating and sending loan applications to different lenders or does LSP make API requests with each lender separately?
    • Query 2: Are all API calls asynchronous? Are there Turnaround Time SLAs for the different services?
    • Query 3: Architecture diagrams – General LSP and Sahay GST
  • By Sudhanshu Shekhar
    • Query 4: API flow sequence diagrams
    • Query 5: How do I represent other loan products?
  • By Ankit Singh
    • Query 6: Using OCEN APIs and becoming an LSP
    • CredAll – a collective of lending ecosystem players

After the presentation, our volunteers answered some questions from the community including:
– What is the role of LSPs in the collections process?
– What is the difference between an LSP and a TSP?
– How does the Common Pledge Registry fit in?

We will be hosting weekly open house sessions to keep diving deeper into OCEN. The next such event will take place at 5pm on 14 August 2020.

Readers who wish to learn more about OCEN are encouraged to share this post and sign up now for the session below or click here.

As always, in order to successfully create a new credit ecosystem for Bharat it will take the collaborative effort of participants from every corner of our fintech ecosystem.

If you’re interested in participating as a:

  • Loan Service Provider
  • Lender
  • Technology Service Provider

please drop us an email at [email protected]

Readers may also submit any questions about the OCEN to the same email address. We shall do our best to answer these questions during next Friday’s open house discussion. 

If you would like to know more about becoming an LSP, please check out www.credall.org (CredAll is a collective of lending ecosystem players to drive cash flow based lending)


Recommended Reading:

Chapter 7 and 8 in RBI UK Sinha MSME committee report: https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=924

Introduction to India Stack’s fourth layer – Data Empowerment & Protection Architecture: https://www.youtube.com/watch?v=mW__azI8_ow

iSPIRT Second Open House on OCEN: Varied LSP Possibilities

On 31st July we hosted the second open house discussion on Open Credit Enablement Network (OCEN). This week’s session covered several potential Loan Service Provider (LSP) products and business cases, and answers to questions that came up following last week’s introductory presentation.

To recap, OCEN is a new paradigm for credit that seeks to provide a common language for lenders and marketplaces to build innovative, financial credit products at scale. OCEN seeks to reimagine the lending ecosystem so that any service provider that interfaces with consumers and MSMEs can become a Fintech-enabled credit marketplace, or more specifically, a Loan Service Provider.  

The discussion this week centred around what kind of role LSPs could play in an OCEN-enabled cash flow lending value chain. OCEN APIs can enable lending products for both consumers and businesses, and for both capital and operating expenses. They are designed to allow for several different types of LSPs and financial products to flourish. 

To build this new credit economy, we need to move from the ‘Lend and Forget’ mindset of traditional lenders to the holistic ‘Lend, Monitor and Collect’ model allowed by the myriad of service providers and marketplaces in our tech ecosystem. These platforms not only have insightful data into their user’s commercial activity but they have an ongoing interface and interaction with potential borrowers.

With OCEN standardisation, LSPs can improve and contribute to all the five aspects of lending i.e. acquisition, underwriting, ROI, collections and monitoring. Tailored credit products can be plugged in at every stage in a typical supply chain (from ‘Procurement to Pay’) to help ease liquidity concerns and ensure business continuity. 

Our volunteers illustrated this with two examples:
1) A seller on the Government e-marketplace (GeM) obtaining invoice financing through the Sahay GeM LSP

2) A truck owner availing of Business-Vehicle Trip Financing through a logistics company performing the role of an LSP

OCEN is also enabling the creation of a new type of credit product that is digitally applied for and disbursed, where the end use of the loan is identified and paid for, and where repayment of the loan is enabled by the locking of incoming cash-flow.

Every participant in our fintech ecosystem is incentivised to take part in this new open credit economy enabled by OCEN. There is an opportunity here for lenders, service providers, aggregators and tech providers to all play their role in bridging India’s credit gap and giving our people and businesses the support they need.

The second session on OCEN covered the following topics broadly, and the entire webinar is also available on our official Youtube channel:

  • By Siddharth Shetty
    • An introduction to iSPIRT and our values
  • By Ankit Singh
    • Recap of what OCEN is, and how LSPs fit in to the framework
    • Recap of Sahay, the reference app for OCEN (and the first LSP)
    • Becoming an LSP (and the role of CredAll)
  • By Nipun Kohli
    • Examples of different cash-flow-lending products enabled by OCEN
    • Key differences between traditional lending and credit products on OCEN
    • How LSPs can participate across the lending value chain
    • ‘Procurement to Pay’ credit products
    • Product example 1: GeM – Procurement to Pay
    • Product example 2: Business-Vehicle Trip Financing
  • By Praveen Hari
    • Building new credit products on OCEN
    • The Type 4 loans

After the presentation our volunteers answered some questions from the community including:
– How is Sahay different from TReDS?
– How does the underwriting take place for LSP-enabled loans?
– How can risk be managed between the LSP and the lender?

We will be hosting weekly open house sessions to keep diving deeper into OCEN. The next such event will take place at 5 pm on 7 August 2020


Readers who wish to learn more about OCEN are encouraged to share this post and sign up now for the session below or click
here.

As always, in order to successfully create a new credit ecosystem for Bharat it will take the collaborative effort of participants from every corner of our fintech ecosystem.

If you’re interested in participating as a:

  • Loan Service Provider
  • Lender
  • Technology Service Provider

please drop us an email at [email protected]

Readers may also submit any questions about the OCEN to the same email address. We shall do our best to answer these questions during next Friday’s open house discussion. 

If you would like to know more about becoming an LSP, please check out www.credall.org (CredAll is a collective of lending ecosystem players to drive cash flow based lending)

About the Author: The post is authored by Rahul Sanghi

Recommended Reading:

Chapter 7 and 8 in RBI UK Sinha MSME committee report: https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=924

Introduction to India Stack’s fourth layer – Data Empowerment & Protection Architecture: https://www.youtube.com/watch?v=mW__azI8_ow