Open Credit Enablement Network (OCEN)
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OCEN is a credit protocol infrastructure, which will mediate the interactions between loan service providers, usually fintech and mainstream lenders, including all large banks and NBFCs.
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It is developed by a think tank, Indian Software Products Industry Round Table (iSPIRT).
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With this, a credit will become more accessible for a large number of entrepreneurs and small businesses in the country.
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Private equity and venture capital players, angel investors, high net worth individuals and others also could be part of this exercise as investors.
How will it work?
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iSpirit is partnering with key leaders such as SBI, HDFC Bank Ltd., ICICI Bank Ltd., IDFC First Bank Ltd., Axis Bank Ltd. etc. for this new credit rail.
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Account Aggregators which will be using these APIs to embed credit offerings in their applications, and will be called ‘Loan Service Providers’, which will play a crucial role in democratizing access to credit, and lowering interest rates for customers.
Why need OCEN?
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The cost of lending being too high in India, small value loans becomes very unfeasible.
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OCEN which seeks to connect lenders to marketplaces and thereby to borrowers is a technology system.
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If implemented, the technology can democratize lending to micro-enterprises and street vendors in a big way.