Frictionless credit, next big bet
RBI is poised to roll out its next major financial innovation, a technology platform that enables 'frictionless credit'. The platform, proposed to be called Unified Lending Interface (ULI), aims to facilitate a seamless and consent-based flow of digital information, including land records, to lenders from multiple data service providers. This, Das added, would reduce the time required for credit appraisal, particularly for smaller and rural borrowers.
Coincidentally, his statement comes at a time when the account aggregator (AA) framework — created by the market-led industry alliance Sahamati and launched three years ago by RBI — has logged a record 100 mn consents. AA is using a framework like ULI to shift away from collateral-based lending to one premised on cash flows, addressing the formal credit needs of millions of underserved Indians.
In short, India is poised to roll out another initiative to democratise access to credit. In the last decade, India banked the unbanked, whereby 80% of adults today own a bank account. Now, by seeking to enable universal lending, RBI is breaking down barriers to provide financial resources to a broader spectrum of borrowers. The impending convergence of fintech and AI will only accelerate this trend of serving the underbanked.
Prior to AA's launch, access to formal credit required borrowers to jump through many hoops, including providing credit scores and collateral. While this mitigated the risk on loans offered by banks, it excluded a large segment of borrowers.
According
