Jitendra S.’s Post

OCEN- A DIGITAL TRANSFORMATION CREDIT SYSTEM. OCEN is a digital infrastructure developed by the Indian government to democratize the small-ticket credit market and solve the credit gap problem faced by MSMEs. - MSMEs contribute significantly to India's GDP, employment growth, and innovation, yet they receive a disproportionately small share of credit from the financial system. - The lack of collateral and credit history is the primary reason for the credit gap problem. - The OCEN platform is built upon Aadhaar, UPI, GST, and the robust banking system of India to provide universal access to credit through a standardized digital infrastructure that enables lenders to assess and disburse loans to MSMEs with minimal friction. - The platform also ensures privacy and security through consent-based data sharing and standardized APIs. - The OCEN platform is expected to revolutionize the credit landscape for MSMEs in India and boost their contribution to the Indian economy. #ocen #msme #msmeindia #credit #upi #digital #technology #payments #creditriskmanagement #india #future #opennetworking #fintech

#FinancialInclusion #DataInsights AePS, or Aadhar Enabled Payment System, is a bank-led model that allows online financial transactions through business correspondents of any bank using just an #Aadhar card. This can be done as soon as the Aadhar card is seeded with the customer’s bank account. The years between 2016 to 2019 saw a steady growth rate in AePS transactions, while there was a massive jump between March 2020, when it was at 172 million transactions, to April 2020, when it was at 403 million transactions. From 2021 to now, AePS transactions have mostly stabilised.   Developed by the National Payments Corporation Of India (NPCI) to speed-track financial inclusion in the country, AePS simplifies and makes basic banking transactions far more accessible. #FIInsights #FinTech #NBFC #MFI #CoopertiveBank #SmallFinanceBank #Banking Aadhar Card India Unique Identification Authority of India (UIDAI) Reserve Bank of India (RBI) Indian Ministry of Finance India Data Portal

As technology continues to advance, UPI has revolutionized banking by enabling the seamless transfer of funds and extending banking services to even the most remote locations. RBI's move to enable pre-sanctioned credit lines via UPI may revolutionize transform lending. In 2022, MSMEs contributed ~30% to India’s GDP growth and yet only 11% of them had access to formal credit. 60% of all credit demands remained unmet. Why? Structural impediments have created challenges. ⚡ High risk in serving them due to poor or nonexistence of credit score  ⚡ Operational costs (such as underwriting and collection costs) are very high  ⚡ Limited access to a vast majority of borrowers To address such challenges, Open Credit Enablement Network (OCEN) has been established to facilitate the flow between lenders, borrowers, and loan service providers (LSPs). How will it work? [1] Borrowers will apply for loans either through LSPs or directly with lenders. [2] Acting as intermediaries LSPs will help borrowers to reach lenders. LSPs will provide lenders with tools to assess borrowers’ creditworthiness. OCEN has the potential to disrupt the credit market in India by providing the necessary financing for MSMEs to grow and evolve into SMEs or large corporates. Developed by iSPIRT, OCEN is constructed upon the foundation of India Stack, comprising four fundamental layers: [1] 𝐈𝐝𝐞𝐧𝐭𝐢𝐭𝐲: Ensures every Indian has a unique digital identity to ensure verification, reduce fraud and enhance credit accessibility. [2] 𝐃𝐚𝐭𝐚: Ensures secure and reliable sharing of financial data among all players. [3] 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬: Based on UPI, it enables instant real-time transfers. [4] 𝐀𝐩𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐏𝐫𝐨𝐠𝐫𝐚𝐦𝐦𝐞 𝐈𝐧𝐭𝐞𝐫𝐟𝐚𝐜𝐞𝐬 (𝐀𝐏𝐈𝐬): The APIs layer provides a standardized framework enabling seamless communication. API’s interoperability and scalability are pivotal for OCEN’s success. OCEN aims to reshape India's credit landscape for small businesses, leveraging open-source digital infrastructure to address the significant credit gap in the country. Source: Forbes #india #rbi #finance #msme #banking #lending #credit #network #ocen #money #linkedinlearning

MSME enterprises have always been the backbone of the Indian economy and often struggle to get loans for a reasonable rate from banks. The reason is lack of proper documentation, risk analysis and credit history of the enterprise Due to this gap, unofficial lending happens at most of the places costing around 36% interest rate per annum for a small capital. This can vary like 3-5% per month, sometimes weeks too. This government intiative is just solving the problem of credit gap OCEN (open credit enablement network ) : Fintech companies like Paytm have the initial record of credit history of an enterprise by offering a small amount of loans. Third party companies, track this information from enterprise and supply the history to banks. This will help banks to have a credit history of the MSME, income flow and offer a credit surprisingly, OCEN have even granted a small loan of Rs.160. Companies like 12% club ( Bharat pe ) have been built to solve this problem using AI to predict percentage of defaulting and decide the loan amount for MSME However P2P lending is anyways considered as risk from the lenders point of view but the initiative was successful. The success of 12% club demonstrates the gap in the market for credits at small amounts. Hopefully, if OCEN runs successfully, it can secure the 30% GDP which is contributed by MSME sector. Thanks for reading ! #ai #network #fintech #economy #banks #GDP #MSME #loans #bharatpe