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Broadening Credit Access: The Quiet Evolution of OCEN

Financial ecosystems are rarely transformed overnight. Instead, they evolve through the steady
alignment of technology, policy, and trust. Over the past year, the Open Credit Enablement
Network (OCEN) has been moving quietly in this direction, acting as a digital bridge between
credit-starved MSMEs and a diverse pool of lenders.
The Growth Narrative: In Q1-2025, the network facilitated 5,641 loans totaling 19,795 Lacs.
Fast forward to Q1-2026, and the momentum has scaled to 35,485 loans with a disbursement
value of 112,484 Lacs. This represents a 468% surge in disbursement value—a testament not to
the protocol alone, but to the readiness of the Indian MSME to embrace digital, cash-flow-based
credit.

Strengthening the Foundation

Beyond the numbers, the structural progress of the ecosystem offers a glimpse into a more
inclusive future. Today, six diverse lenders—ranging from large Public Sector Undertakings
(PSUs) to agile NBFCs—are live on GeM Sahay and many others in the process of integration.
This diversity ensures that credit is not a ‘one-size-fits-all’ product but is tailored to the risk
appetite and specific needs of the borrower.
The horizon is also widening. We are currently piloting programs for Non-Sole Proprietors on
GeM Sahay, significantly expanding the eligible borrower base. Furthermore, MSME suppliers to
the CGDA can now avail finance against Purchase Orders via GeM Sahay, marking a critical step
in supporting those who serve our national interests.

The Quality of Growth

A frequent concern in rapid credit expansion is delinquency. However, OCEN’s emphasis on
cash-flow-based lending rather than traditional asset-based collateral has yielded encouraging
results. To date, lenders have observed negligibly low delinquency across programs, proving that
data-backed lending to the ‘unbanked’ is not just a social imperative, but a sound financial
strategy.

Looking Ahead: An Invitation to the Ecosystem

The journey has only just begun. We are actively developing programs that touch every corner of
the economy:

  • Micro-MSMEs: Providing vital credit to the gig economy and individual workers.
  • Agri & Dairy: Strengthening the backbone of rural commerce through value-chain
    financing.
  • Digital Sellers: Empowering e-commerce marketplace sellers and MSMEs using modern
    ERP/Accounting software.
  • Regional Clusters: Addressing the unique needs of localized industrial hubs.

For lenders, platforms, and technology providers, OCEN represents a unique opportunity to
participate in a high-growth, low-friction credit market. As we move forward, we remain
committed to a humble approach—learning from the data, listening to our partners, and ensuring
that every disbursed Rupee contributes to the broader story of India’s economic resilience.

OCEN: Empowering Growth, One Transaction at a Time.

For more information, please visit: http://ocen.dev

Please note: The blog post is authored by our volunteer, Rahul Bhaik

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OCEN 2025

The calendar year 2025 has been a transformative period for the Open Credit Enablement Network (OCEN), evolving from a digital protocol into a powerhouse for financial inclusion. During 2025, OCEN successfully facilitated approximately 70,000 loans, resulting in over ₹1,600 Crore in disbursements.

This journey is not just about the numbers; it is about proving that a digital-first, cash-flow-based approach can solve the long-standing credit gap for underserved MSMEs with unparalleled efficiency.

A Year of Relentless Monthly Momentum

The 2025 journey began with a steady climb and rapidly escalated as more lenders and borrower agents integrated into the ecosystem. The monthly growth in the number of loans disbursed showcases a consistent upward trajectory. This steady monthly rise provided the foundation for the explosive quarterly growth that defined the year.

Consistent Quarterly Growth (QoQ)

When looking at the 2025 performance on a quarterly basis, the scale of adoption becomes even more evident. The network didn’t just grow; it accelerated every three months.

Period (2025)No. of LoansDisbursements (₹ Lakhs)
Quarter 15,64119,795
Quarter 213,51627,316
Quarter 322,14248,092
Quarter 428,12265,275

The jump from Q1 (5,641 loans) to Q4 (28,122 loans) represents an increase of nearly 400% in loan volume within a single year. Similarly, disbursements surged from ₹197.9 Crore in Q1 to over ₹652.7 Crore in Q4, demonstrating the massive appetite for small-ticket, short-tenure credit.

Portfolio Quality: The Ultimate Validator

The most significant achievement of 2025 isn’t just the volume—it’s the quality of the credit. Traditional MSME lending often suffers from high risk and significant non-performing assets (NPAs). OCEN has fundamentally challenged this narrative.

Participating lenders have seen highly encouraging results in portfolio health, characterized by strong performance, minimal portfolio losses and high confidence. The cash-flow-based underwriting model allows lenders to assess real-time business health rather than relying on stale collateral documents. Data-driven, short-tenure lending ensures high repayment rates.

The Future is Cash-Flow Based

OCEN’s 2025 journey proves that when you align technology with the actual business cycles of small enterprises, everyone wins. MSMEs get the “just-in-time” capital they need, and lenders gain access to a high-quality, low-risk asset class. With over ₹1,600 Crore disbursed in 2025, the protocol has set a new benchmark for how India can democratize credit and fuel the next wave of economic growth.

For more information, please visit: http://ocen.dev

Please note: The blog post is authored by our volunteer, Rahul Bhaik

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OCEN Crosses the ₹200 Crore Monthly Milestone: Redefining MSME Credit Quality

November 2025 has officially set a new standard for the future of cash flow based digital lending for MSMEs in India. For the first time, monthly disbursements through the OCEN protocol have breached the ₹200 Crore mark, proving that the shift toward cash flow-based lending is not just a pilot—it is a powerhouse.

As we move toward the close of 2025, the narrative is shifting from “how much” can be lent to “how well” it is being managed.

November 2025: By the Numbers

The growth trajectory of OCEN continues to follow a healthy curve. The protocol recorded its highest disbursement month to date, characterized by high-velocity, small-ticket lending that reaches the very grassroots of the MSME sector.

  • Total Disbursement: ₹207.40 Crore
  • Total Loans Disbursed: 9,446
  • Primary Loan Profile: Short-tenure, small-ticket working capital

This monthly performance brings the total calendar year disbursement to new heights, reinforcing OCEN’s role as an important digital highway for reducing the MSME credit gap.

The Quality Paradox: High Growth, Lowest Delinquency

In traditional lending, rapid growth often comes at the cost of asset quality. OCEN is turning this logic on its head. Despite the surge in volume, the participating lenders are reporting the lowest delinquency rates in the MSME segment.

The loan portfolio performance on OCEN has been exceptionally better than traditional MSME lending portfolios, which often struggle with high NPAs due to delayed data and static underwriting. By leveraging cash flow transaction data, OCEN allows for precision underwriting enabling the lenders see the actual health of a business today, not six months ago. As the Lenders focus on underwriting a Cash flow transaction rather than underwriting a borrower, the Short-tenure loans ensure that capital is cycled quickly linked to the Cash flow being financed, reducing long-term exposure risk.

This “quality-first” growth has sparked a wave of confidence across the participating lenders. We are currently seeing multiple new lenders and borrower agents at various stages of onboarding onto the OCEN framework. As more entities join, the network effect will only intensify, making credit even more affordable and accessible for the millions of “Rajnis” running small shops and enterprises across India. OCEN is not just lending money; it is building a system of trust where verified data, not just collateral, becomes the currency for growth.

For more information, please visit: http://ocen.dev

Please note: The blog post is authored by our volunteer, Rahul Bhaik

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India’s silent Credit Revolution: OCEN Surpasses 50,000 Loans and ₹1100 Crore in 2025

The Micro, Small, and Medium Enterprises (MSME) sector is the engine of the Indian economy, yet for years, it has been choked by a massive credit gap. Traditional, collateral-heavy lending processes simply could not keep pace with the dynamic, short-tenure funding needs of small businesses.

Open Credit Enablement Network (OCEN): Built on the principles of India Stack, this digital protocol is not just facilitating loans; it is fundamentally rewiring the architecture of MSME credit, making it instant, affordable, and accessible. The monthly growth witnessed in the calendar year 2025 proves the model is not just viable, but highly scalable, marking a new era of financial inclusion.

The Power of Cash Flow-Based Lending

OCEN’s disruptive approach lies in shifting the lending paradigm from asset-based to cash flow-based underwriting. For millions of creditworthy small businesses, their true financial health is reflected in their daily or monthly transactions, not in static, year-old balance sheets. By leveraging India’s digital public infrastructure, OCEN allows lenders to assess risk based on real-time, consented data helping them to take faster decisions and making small-ticket, short-tenure credit economically feasible for lenders.

This framework is specifically designed to solve for the underserved, those who need smaller loans for shorter periods but have previously been locked out of formal credit channels.

Demonstrating Growth and Inclusion

OCEN demonstrated its ability to deliver on its promise of democratizing credit. The network has disbursed 50,426 loans and amounting to ₹1142 Crore in total disbursement within the calendar year till October 2025.

October 2025: OCEN saw the highest ever monthly disbursement of 191 Crore across 9127 loans Catering directly to the daily needs of MSMEs. The growth highlights how the protocol’s architecture is perfectly suited for mass-market financial inclusion. The emphasis is clearly on the number of lives touched and the frequency of credit access, rather than just the size of the total loan book.

Validating the Model: Exceptional Portfolio Health

The true testament to OCEN’s cash flow-based underwriting is not just the speed and volume of disbursement, but the quality of the loan book. Crucially, the loans disbursed through the OCEN protocol have demonstrated very minimal Non-Performing Assets (NPAs). This performance is exceptionally better than the NPA figures typically observed in traditional MSME lending portfolios across the industry. This is not just a marginal improvement; it is a fundamental validation of the protocol’s ability to accurately identify and price risk among digitally visible, cash flow-rich MSMEs. By moving beyond outdated collateral requirements and relying on real-time transactional data,

OCEN is proving that digital, embedded credit is inherently safer and more sustainable than conventional lending practices, offering a high-growth, low-risk opportunity for participating lenders.

For more information, please visit: http://ocen.dev

Please note: The blog post is authored by our volunteer, Rahul Bhaik

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Cash Flow based Lending on OCEN: Fuelling the MSME Growth Engine

The backbone of our economy—the Micro, Small, and Medium Enterprises (MSMEs)—often face a
massive hurdle of securing timely and affordable credit. Cash Flow Based Lending can solve for
millions of creditworthy small businesses which are underserved. For a growing MSME, their true
health lies in their daily or monthly business transactions and cash flow—the consistent stream of
money coming in and going out.
OCEN is built to systematically address the MSME credit gap by standardizing and democratizing
Cash flow based lending. OCEN proves that cash flow-based lending is not only viable but highly
scalable, making small-ticket, short-tenure loans economically feasible for lenders. The rising
numbers reflect it’s growing adoption, making credit accessible, affordable, and instant for MSMEs.

For more information, please visit: http://ocen.dev

Please note: The blog post is authored by our volunteer, Rahul Bhaik

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Cash Flow-Based Lending: Unlocking Credit Access for India’s MSMEs

Micro, Small, and Medium Enterprises (MSMEs) are the backbone of India’s economy, driving growth and generating millions of jobs. Yet, despite their importance, MSMEs continue to face a massive credit gap. Traditional collateral-based lending often leaves them underserved, making access to timely and affordable credit one of their biggest challenges.

Over the years, schemes like Mudra Loans, CGTMSE, Capital & Interest Subsidy Programs, and the TReDS (Trade Receivables Discounting System) have contributed meaningfully to MSME financing. TReDS, in particular, has shown encouraging results by enabling invoice-based financing for a segment of MSMEs. However, these efforts only address a part of the problem. The diverse working capital cycles and sector-specific needs of MSMEs demand customised, flexible credit solutions.

This is where Cash Flow-Based Lending (CFL) stands out as a transformative approach. Instead of relying on collateral, CFL assesses an enterprise’s actual business cash flows to determine loan eligibility. This not only expands credit access to previously excluded businesses but also enables lenders to design loan products that align with real business needs.

TReDS has already proven the power of cash flow-linked credit for receivables financing. But its scope is limited. India requires many more frameworks like TReDS, supported by scalable models such as OCEN (Open Credit Enablement Network), which democratise access to small-ticket, customised loans by leveraging digital cash flow data. While TReDS focuses on invoice-backed receivables, OCEN opens new possibilities through embedded finance and digital cash flow data. Both models are built on the same principle—cash flow as the foundation of creditworthiness—and can co-exist to bridge the critical MSME credit gap faster.

For more information, please visit: http://ocen.dev

Please note: The blog post is authored by our volunteer, Rahul Bhaik

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Lessons from India’s Digital Public Infrastructure Journey

In just a decade, India has redefined how nations can harness technology for the public good. Through Digital Public Infrastructure (DPI), such as Aadhaar, UPI, and Account Aggregator, followed by newer innovations like OCEN and ONDC, India has shown the world how open, interoperable, and inclusive digital systems when designed as privately provisioned, public infrastructure; can spark innovation, scale rapidly, and empower communities at the grassroots.

To capture these lessons and provide a practical guide for policymakers, technologists, and global stakeholders, iSPIRT Foundation has contributed to the development of the DPI Handbook: Foundations of Digital Public Infrastructure. This handbook distills a decade of India’s pioneering experience into actionable insights, frameworks, and design principles that can help other nations build their own inclusive and interoperable DPI. The paper is now published on the Research and Information System for Developing Countries (RIS)

This Handbook is not the product of a single author, but rather the culmination of years of dedicated volunteerism at iSPIRT, where technologists, policymakers, entrepreneurs, and thinkers came together to exchange ideas, build prototypes, and debate design choices. Each page reflects this collaborative spirit, proof that when diverse minds work in concert, they can create frameworks that transform entire societies.

We extend our deepest gratitude to the iSPIRT volunteer community, past and present, whose passion and commitment, have been instrumental in shaping India’s DPI journey. Their contributions embody the ethos of building digital public infrastructure as a shared national mission.

We hope the DPI Handbook becomes both a guide and an inspiration, for nations building their own digital public infrastructure, and for all who believe that technology, when designed for the public good, can change the course of societies.

Please note: The blog post is co-authored by our volunteer, Arun Iyer

iSPIRT would like to extend its gratitude to Shri. Rajeev Chawla – IAS, Strategic Advisor and Chief Knowledge Officer- Ministry of Agriculture & Farmer’s Welfare who co-authored this Handbook, for his insightful perspectives. We would also like to thank Shri. Sachin Chaturvedi, Director General – RIS for graciously writing the Preface to this Handbook

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OCEN July 2025 Snapshot

MSME Lenders need to start looking beyond AUM to truly value short-term loan pools. OCEN helps minimize loan processing costs and provide easy access to new borrower segments at scale. Specialized roles, including collections partners, help reduce the burden on lenders. Short-term lending products for marketplaces where Loan Agents also control the income-source for the borrower can use escrow-based-repayments to mitigate the collections risk. New datasets enable lenders to make easier underwriting decisions for cash-flow based lending.

Both TReDS and OCEN play critical roles in improving MSME access to credit, albeit for different segments of the market. Unlike TReDS, OCEN eliminates the buyer acceptance bottleneck. Instead, it leverages alternative underwriting models, specialized loan products, and digital collections to offer small‑ticket, short‑tenure working capital loans to MSMEs.

While TReDS will likely continue growing in disbursal volumes and strengthen formal receivables financing, OCEN’s focus on smaller, flexible loans positions it to grow much faster in terms of number of loans disbursed. Though TReDS and OCEN are targeting the same goal, both have its own unique features to succeed and co-exist to meet the common goal faster. OCEN becomes the next choice to solve for smaller businesses with small ticket loan requirements who are beyond the formal credit net and do not fit in the TReDS window. OCEN is growing fast with 30% MoM increase in number of loans due to the framework capabilities.

MetricJan-25Feb-25Mar-25Apr-25May-25Jun-25Jul-25
No. of Loans Disbursed895156731793861455251036233
Disbursement Amount in Lacs2517336713911761390821062113886

For more information, please visit: http://ocen.dev

Please note: The blog post is authored by our volunteer, Rahul Bhaik

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OCEN June 2025 Snapshot

Open Credit Enablement Network (OCEN) is designed to serve borrowers across all turnover bands — including micro and small businesses whose buyers are not large enough to qualify for TReDS. This inclusivity enables it to reach segments of the MSME sector that remain underserved by formal credit channels.

OCEN’s ability to leverage alternative underwriting models, specialized loan products, and digital collections to offer small‑ticket, short‑tenure working capital loans to MSMEs solves for smaller businesses with small ticket loan requirements who are beyond the formal credit net. With this unique framework, OCEN is expected to see a decent growth in number of loans. This growth would be a significant reflection of ensuring access of credit to the underserved who only need smaller loans for shorter tenures and will increase penetration in the new to credit MSME segment. Below is a snapshot of OCEN’s journey for the last 6 months:

MetricJan-25Feb-25Mar-25Apr-25May-25Jun-25
No. of Lenders Live on OCEN777888
No. of Borrower Agents Live666666
No. of Technology Service Providers (TSPs) with active deployment 233333
No. of Loan Products111111121212
No. of Loans Disbursed89515673179386145525103
Disbursement Amount₹25.17 Crore₹33.67 Crore₹139.11 Crore₹76.13 Crore₹90.82 Crore₹106.21 Crore
Average Loan Ticket Size₹2.81 Lakh₹2.14 Lakh₹4.37 Lakh₹1.97 Lakh₹1.99 Lakh₹2.08 Lakh

For more information, please visit: http://ocen.dev

Please note: The blog post is authored by our volunteer, Rahul Bhaik

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Empowering India’s Growth Engines: The Critical Role of Credit for MSMEs

June 27 – International MSME Day

Micro, Small, and Medium Enterprises (MSMEs) are the unsung heroes of India’s economy. Employing over 11 crore people and contributing nearly 30% to the country’s GDP, MSMEs are not just businesses – they are drivers of innovation, inclusion, and local development.

On this MSME Day, we celebrate their resilience and ingenuity. But it’s also a moment to reflect on what holds them back – and how access to credit remains one of the most critical challenges they face. For MSMEs, timely and adequate credit is often the difference between scaling up and shutting down. Credit powers, yet, the reality is stark: a majority of MSMEs in India still rely on informal sources of finance or are denied loans due to lack of collateral or formal credit history.

According to estimates by the IFC, India’s formal MSME credit gap exceeds ₹25 lakh crore. Despite government schemes and fintech innovations, many small businesses struggle to access formal credit. This gap doesn’t just hurt MSMEs – it stifles job creation, reduces GDP growth, and hampers economic inclusivity.

A Shift Towards Cash-Flow-Based Lending

The good news? The ecosystem is evolving.

With initiatives like Account Aggregator, OCEN (Open Credit Enablement Network), and digitization of GST and banking data, lenders are moving towards cash-flow-based lending models. These innovations focus on real-time business performance rather than outdated collateral-based methods.

Such models enable more flexible, faster, and inclusive credit access to deserving MSMEs, especially those in Tier 2 and 3 cities.

To truly empower MSMEs with credit, the following steps are critical:

  • Financial literacy programs to help MSMEs manage credit and build a borrowing track record.
  • Policy support to incentivize banks and NBFCs for lending to first-time or underserved borrowers.
  • Greater public-private collaboration to build robust digital lending infrastructure.
  • Simplification of loan application processes through digital channels.

Celebrating MSMEs, Supporting Their Dreams

On this MSME Day, let’s go beyond celebration. Let’s reaffirm our commitment to unlocking finance for the backbone of our economy.

Whether you’re a policymaker, lender, fintech innovator, or simply a consumer – supporting MSMEs means supporting India’s future.

Because when MSMEs grow, India grows.

For more information, please visit: http://ocen.dev

Please note: The blog post is authored by our volunteer, Rahul Bhaik

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OCEN Ecosystem Progress Snapshot:

The Open Credit Enablement Network (OCEN) post its initial pilot deployment and continuous upgrades and improvements has seen growing participation across the ecosystem. OCEN’s transition from its early stages into the growth phase is now reflecting in its growing volumes and addition of new ecosystem partners. 

Monthly Progress Report: 

With the start of the new financial year, the April-June quarter is usually considered a sluggish season in financial services, more particularly in lending business. Corresponding trend reflects in the April performance on the OCEN traction as well, however April & May are still looking progressive in comparison to Jan & Feb performance, considering March financial year end rush as an exception. As newer products and lenders go live on OCEN, the trendline growth looks promising. 

Here’s a quick look at the latest numbers on the OCEN ecosystem:

MetricJan-25Feb-25Mar-25Apr-25May-25
No. of Lenders Live on OCEN77788
No. of Borrower Agents Live66666
No. of Technology Service Providers (TSPs) with active deployment 23333
No. of Loan Products1111111212
No. of Loans Disbursed8951567317938614552
Disbursement Amount₹25.17 Crore₹33.67 Crore₹139.11 Crore₹76.13 Crore₹90.82 Crore
Average Loan Ticket Size₹2.81 Lakh₹2.14 Lakh₹4.37 Lakh₹1.97 Lakh₹1.99 Lakh

OCEN continues to engage with ecosystem partners to build the momentum for new cash flow lending products for MSMEs.

For more information, please visit: http://ocen.dev

Please note: The blog post is authored by our volunteer, Rahul Bhaik

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OCEN: Credit Access for MSMEs continues to grow

The volumes and traction on Open Credit Enablement Network (OCEN) continues to grow month on month. The growing trajectory highlights OCEN’s ability to streamline and democratise credit access for MSMEs by leveraging digital public infrastructure and fostering collaboration among lenders, agents, and technology providers. 

Here is a snapshot of the OCEN ecosystem’s key updates for March:

MetricJan-25Feb-25Mar-25
No. of Lenders Live on OCEN777
No. of Borrower Agents Live666
No. of Technology Service Providers (TSPs) with active deployment 233
No. of Loan Products111111
No. of Loans Disbursed89515673179
Disbursement Amount₹25.17 Crore₹33.67 Crore₹139.11 Crore
Average Loan Ticket Size₹2.81 Lakh₹2.14 Lakh₹4.37 Lakh

As OCEN continues to evolve, it is poised to further bridge the credit gap for MSMEs, enabling faster, more transparent, and more inclusive financial support for this vital sector of the Indian economy.

For more information, please visit: http://ocen.dev

Please note: The blog post is authored by our volunteer, Rahul Bhaik

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OCEN: Advancing Digital Public Infrastructure for MSME Credit Access

The Open Credit Enablement Network (OCEN) is steadily progressing from its early stages into a more robust growth phase. With its current ecosystem participants, OCEN has started facilitating smoother credit delivery to MSMEs. At the same time, numerous other players are integrating into the protocol and developing specialized loan offerings tailored to the needs of MSMEs.

Here’s a snapshot of the OCEN ecosystem’s key updates for February:

MetricJan 2025Feb 2025
No. of Lenders Live on OCEN77
No. of Borrower Agents Live66
No. of Technology Service Providers (TSPs) with active deployment 23
No. of Loan Products1111
No. of Loans Disbursed8951567
Disbursement Amount₹25.17 Crore₹33.67 Crore
Average Loan Ticket Size₹2.81 Lakh₹2.14 Lakh

OCEN continues to engage with new participants to further expand the ecosystem, adding new products and scaling up efforts to transform credit access for MSMEs on a large scale.

For more information, please visit: http://ocen.dev

Please note: The blog post is authored by our volunteer, Rahul Bhaik

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Comparing Key Frameworks in the Digital Lending ecosystem: ULI, OCEN, and AA

In the evolving landscape of financial inclusion and digital lending, India has introduced several innovative frameworks designed to streamline access to credit, enhance transparency, and create seamless financial ecosystems. Among these, the Unified Lending Interface (ULI), Open Credit Enablement Network (OCEN), and Account Aggregator (AA) stand out as key initiatives aimed at modernizing the way credit and financial data are managed.

While all three initiatives aim to transform the lending sector, each has distinct roles, benefits, and functions. To better understand their unique features and how they interact with one another, we’ve put together a detailed comparison chart.

This side-by-side breakdown helps you identify the core differences between ULI, OCEN, and AA, their respective use cases, and how they collectively contribute to building a more inclusive and tech-driven financial ecosystem in India. Whether you’re a fintech enthusiast, a policy maker, or simply looking to understand the future of credit access, this comparison will offer valuable insights into these transformative frameworks.

 ULI (Unified Lending Interface)OCEN (Open Credit Enablement Network)AA (Account Aggregator)
PurposeStandardized API interface for Lending institutions providing borrower’s financial and non-financial data from various sources, including government databases, and financial institutions. Helps financial institutions to reduce friction for accessing the information needed for quick loan underwriting decisions and efficient loan application processing.  OCEN is a framework of application programming interfaces (APIs) for interaction between lenders, loan agents, collection and disbursement partners, derived data providers, and account aggregators OCEN facilitates flow of credit between borrowers, lenders, and credit distributors using a common set of standards. Various participants in the credit ecosystem can seamlessly connect with one another without needing to build customised APIs and infrastructure. OCEN aims to enable cash-flow based unsecured financing for MSMEs as against balance sheet and collateral based financing. Both ULI and AA can be derived data providers in the OCEN ecosystem.  The Account Aggregator (AA) framework allows users to share consent driven financial data across institutions. Users can access their financial information from multiple institutions in one place, and can decide who can access their data, for how long, and for what purpose. The FI Types are managed by ReBIT.
UsersRegulated entities like Lenders, etcMSME-focused Borrower Agents and Lenders. Other ecosystem participants include Derived Data Providers, Collection Agents, Disbursement Agents and KYC Partners  Financial Information Users which are Regulated entities and Individuals who wish to access their own financial details
Key FunctionalityEnabling RE’s and Marketplaces to fetch different types of financial and non-financial data for underwriting using standard interface.Standard rails to connect various participants in the Cash flow based MSME lending ecosystem. Enabling building customised credit products for MSMEs and empowering the Borrower agent as a lynchpin and a representative of the borrowers.  Providing safe, user-consented sharing of financial information between regulated financial institutions via the Account Aggregator framework. Individuals can have a holistic single source to view financial data across various institutions.  
Data UsageUtilizes borrower data from diverse sources like banks, land records, and financial history.Utilizes specific business data of MSMEs like invoices, transactions, etc., for the credit product creation. Any kind of data can be passed to the Lender in the form of derived data. For eg. Government e-Marketplace shares borrower performance data with lenders post consent.  Uses consolidated financial data like bank accounts, GST, income, etc., from FIPs.
Role in EcosystemStreamline credit access by integrating borrower data from multiple sources for accurate financial assessment, enabling faster loan approvals through advanced analytics, facilitating easy integration with standardized APIs, and providing lenders seamless access to comprehensive borrower information to simplify credit appraisal and reduce documentation  Fosters innovation in MSME credit by enabling tailored loan offerings and faster credit flow thus enabling access to credit to MSMEs which earlier did not have access to the same. Reduce cost of short tenure, low ticket lending and making it viable to give loans to MSMEs which are end use controlled and enable collection control.Promotes financial inclusion by simplifying financial data sharing and improving credit decision-making. Allowing user to share their data directly with financial institutions in a consented manner removing the data passing through multiple hands.
Technology BackboneConsent-based data-sharing infrastructure; APIs to connect various data sources with lenders.    API infrastructure based on standard OCEN protocol for credit enablement. Participant and Product registries to enable discovery and standardisation within the ecosystem.API-driven, centralized consent architecture defined by ReBIT under the RBI framework.
Regulatory FrameworkProposed under RBI’s initiative to enhance digital lending infrastructure.Digital Public Infrastructure at a mass roll out stage. Once formalised will be managed and regulated as advised by regulators.  Governing law is the RBI’s Account Aggregator framework under the NBFC-AA license.
Use CasesA farmer applies for a loan to purchase farm equipment. Lender is able to access land records and other non-financial and financial data through ULI interface to underwrite the loan application.Zomato as a Borrowers agent on behalf of restaurants enrolled on its platform being able to offer custom loan products specifically built for restaurant partners by the participating lenders based on alternate platform data, ability of providing collection control to lenders via cash flow entrapment and acting as a representative of the borrowers instead of agent of lenders. Like Zomato any of platforms or institutions (like FPO) sitting on a Captive database can utilise OCEN to enable lending on their platform benefiting their users.  Individuals being able to share their multiple bank accounts for specific time periods and for specific purposes with the AA framework using consent mechanism.   Businesses being able to share GSTN data to RE’s for loan underwriting purpose using consent mechanism.
Implementation StageProposed platform; Some pilot Implementations for certain data sources have been done. Overall the ULI is in a development phase.    Few pilots – GeM Sahay, GST Sahay, Jan Aushadhi Kendra and Private network have been successfully tested. More implementations are underway at various stages and gaining traction.Well-established under the RBI’s regulatory framework with multiple FIP’s and FIU’s already integrated.

For more information, please visit: http://ocen.dev

Please note: The blog post is authored by our volunteer, Rahul Bhaik

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Budget 2024 – Empowering Startups and MSMEs, and Doubling Down on DPIs and R&D

This 2024 Budget coming post-election has aroused the most curiosity since the budget of 2014. It is for two reasons that this 2024 Budget is significant as we work towards a Product Nation: Reason 1 is for this budget’s Innovation and related public spending on private innovation and Reason 2 is for the next-generation reforms to create a simpler regulatory environment. It is heartening to note that both items are priority areas.

The continuity of the interim budget announcement of 1 lakh crore for private R&D funding is encouraging enough for the startup ecosystem. Under the Vishvamitra initiative, iSPIRT has been pursuing funding at scale for private sector-led R&D and its commercialization. The announcements of funding research in highly sensitive strategic areas such as Small Modular Nuclear Reactors and setting up a 1000 crore venture capital fund for the Space economy have been on our list of initiatives to advocate for and it is heartening to see the Government address R&D investments in geopolitically sensitive areas. 

The Finance Minister announced, “We will set up a mechanism for spurring private sector-driven research and innovation at commercial scale with a financing pool of 1 lakh crore.” What and how this mechanism will be set up will be critical for enabling R&D in the country to achieve Viksit Bharat 2047.

Among iSPIRT’s top  initiatives is the Stay-in-India checklist, and the request to remove the “Angel Tax” for all classes of investors. The removal of angel tax is the biggest highlight of this budget for the startup ecosystem. The announcement comes after decades of struggle and persuasion. Finally the government has recognised the role of startups in generating employment and has acted in a positive direction. 

There is a huge amount of work pending to reform Ease-of-Doing Business (EoDB) if India is to achieve the set objective of Viksit Bharat 2047. The Finance Minister stating an  intent to “formulate an Economic Policy Framework” to set the “scope of the next generation of reforms for facilitating employment opportunities and sustaining high growth” perhaps speaks about the government’s thinking on it.  

The government’s intention to involve states in ease of doing business (EoDB) efforts is also a very welcome step. We hope the next moves are swift and the government seriously attempts to at least be in the top 10 EoDB destinations globally. This is much needed for MSMEs, Startups, and even to attract FDI in GCCs. The economic survey tabled yesterday also aligns with this thought process. 

“We have successfully used technology for improving productivity and bridging inequality in our economy during the past 10 years” said the budget speech. Public investment in Digital Public Infrastructure (DPI) coupled with innovations by the private sector has been a well-accepted norm now. The Government is serious about using the DPI approach in multiple areas, from agriculture to education, etc. The increased penetration of DPI will eventually help digitalization and penetration of software products in the economy. 

The budget recognising MSME credit as one big area requiring attention has also called for several actions in this direction. One important step is involving PSU Banks to build their in-house capability to assess MSMEs for credit using an MSME’s digital footprint, instead of relying on external assessment. This will encourage banks to develop cash flow based lending on lines of another initiative of iSPIRT – the Open Credit Enablement Network (OCEN) that focuses on information based collateral lending rather than asset based collateral lending which in turn could help in developing a new credit assessment model that evaluates the digital footprints of MSMEs in the economy.