Aadhar architect and Infosys cofounder Nandan Nilekani, at the Global Fintech Fest 2020, pushed for the open credit enable network (OCEN) to connect lenders and marketplaces. Nilekani said it will democratise credit in India and help small businesses and entrepreneurs get loans.
Speaking at the Global Fintech Fest 2020, Nilekani added that democratising credit in India is the need of the hour as for reviving the economy and kick-start consumption. He noted that large volumes of credit is usually directed towards large companies, whereas smaller companies and micro-enterprises are left in the lurch with little or no access to credit at all. This is a huge concern for the next growth phase of the industry, he said.
Nilekani said that the Open Credit Enablement Network (OCEN), a technology currently under discussion if implemented can democratise lending to micro-enterprises and street vendors in a big way. He noted that small credit can become feasible for lenders through account aggregator service protocols, which was developed and backed by RBI.
Amitabh Kant, CEO of NITI Aayog added that the fintech sector has been the shining star of India’s startup and technology ecosystem, enabling seamless transition from physically connected to a physically distant but socially connected environment. “The future of lending will be Phygital,” Kant said. He also emphasised that digital lending will be the next big driver in fintech, driven by retail loans. He also noted that digital lending will constitute 50% of total lending by 2023.
Nilekani also said that India has become a “hotbed” of fintech innovation with inception of Aadhar management body Unique Identification Authority of India (UIDAI) and digital payments management body National Payments Corporation of India (NPCI) over a decade ago. This has facilitated the implementation of products and services like Immediate Payment Service (IMPS), FastTag and Unified Payments Interface (UPI) to make digital payments faster.
Citing the examples of homegrown innovations like UPI and AEPS, Nilekani highlighted these public systems were designed keeping in mind not just the top 50 Mn users but the 1 Bn users. The same should be followed for OCEN, he suggested.
According to DataLabs by Inc42+ estimates, the credit demand in India is projected to be worth $1.41 Tn by 2022. The estimated growth rate in credit demand is 3.73% between FY17 and FY22. Between 2015 and Q1 2019, the total investment in Indian fintech startups was $7.62 Bn with a total deal count of 478. Out of the total funding, 50.13% or $3.82 Bn was in payments tech startups, followed by 25.49% ($1.94 Bn) in lending tech startups, while other fintech startups made up 16.35% of the total investments, and insurance tech contributed 8.03% ($612 Mn).
The post Nilekani Throws Weight Behind Open Credit Enable Network To Help Small Businesses appeared first on Inc42 Media.
Author: Kritti Bhalla
Date : 2020-07-23T06:59:41.000Z