Mint Quick Edit | Dial ULI for digital credit outreach
On Monday, Reserve Bank of India governor Shaktikanta Das announced the launch of its Unified Lending Interface (ULI), a tech platform aimed at “frictionless credit", especially for those who find it hard to borrow. “Just as UPI transformed the payments ecosystem, we expect that ULI will play a similar role in transforming the lending space in India," he said.
Designed to draw data from various sources with the consent of loan-seekers, the new interface promises to smoothen credit appraisals and fit snugly into India’s digital public infrastructure based on Aadhaar IDs and mobile connectivity. Should it work as envisaged, it would place India in a position to close last-mile gaps in formal credit delivery and rescue people from the grip of extortionist moneylenders.
Such a direct online outreach makes far more sense than the exotic instruments of risk-mincing that led the US to its subprime loan crisis in 2007-08. Indeed, the financial advances the world’s under-served need involve reducing asymmetric information at the ground level, rather than lofty remixes of debt assets by investment bankers in glitzy skyscrapers.
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