Know-How Does Open Credit Enablement Network (OCEN) Work

At the Global Fintech Festival 2020, which took place on July 22nd, Nandan Nilekani made the announcement that the Open Credit Enablement Network (OCEN) will soon be launching. That’d be the start of something new for the financial inclusion movement in India. This augmentation of our public digitalization will assist in democratizing finance for a major portion of the population that is considerably credit-starved. It will do this by working in combination with the Account Aggregator architecture.

Addressing issues with the quality of the assets

To put it another way, Open Credit Enablement Network will serve the same purpose for lending that UPI did for mobile payments. That’s an open protocol that would facilitate the smooth transactions in financial information about the customers from the point-of-purchase to banking firms by means of specialized data aggregators, with the client granting consent in real-time. This, in turn, would assist lenders in closing the gap in loan origination, resulting in clients receiving the most accurate estimates available. Open Credit Enablement Network would operate on a trustworthy digital platform and conform to the stringent data protection regulations outlined in the Personal Data Protection Bill, which was introduced to Parliament in 2019.

Online intermediaries such as e-commerce enterprises and digital businesses, also referred to as loan service providers are able to simply incorporate credit products into their platforms without having to make any investments in the creation of new technologies or form partnerships with different lenders. In the future, loan network operators may be able to transition into lending themselves as a result of their low-cost client acquisition, insight into end-user credit use, and improved control over payment flow. Soon, a daily credit settlement line would be made accessible to small shop owners who sell their wares through e-commerce. This line of credit will allow the borrower to borrow money throughout the day and make payments during the evening.

On the platform maintained by the loan service provider, borrowers, who are mostly small enterprises, will have access to the many credit choices made available by several lenders. The credit solution would be conducted entirely online, and applicants will be judged on the basis of their ongoing cash flow rather than their assets and income. As a result of the simplification of the process of applying for a loan and the increased level of competition among lenders, the amount of time it takes to complete the process and the expenses associated with financing should be kept to a minimum.

The Function of an Account Aggregator Within the OCEN

In this Open Credit Enablement Network-powered credit landscape, Account Aggregators serve as facilitators for the credit ecosystem. LSPs are required to include AA APIs into their workflow in order to enable lenders to make digitally protected data requests for borrowers.

Borrowers could provide their approval for officially validated data to be shared with lenders utilizing their AA handles, and this data would then be included in the onboarding, screening, as well as monitoring processes.

The data that is obtained from a borrower’s Financial Information Provider will be presented in a manner that is readable by machines and is easily assimilated by the underwriting model used by the lender.

The lenders would not be allowed to take part in just this new lending ecosystem unless they first adopt AA’s FIP and FIU modules.

Account Aggregators are really an essential part of this reinvented credit jigsaw, and their role in the performance of any Open Credit Enablement Network and LSP supported lending value chain will become a crucial one in the future.


If it is properly executed, Open Credit Enablement Network will cause a disruption in the credit sector in India. This will result in the availability of the financing that is necessary for MSMEs to mature into SMEs or major corporations.

Gunnar Mueller