A drop in the OCEN: Bold credit project has a scale problem

Large parts of India’s economy rest on the shoulders of small businesses, and yet, they are deprived of the lifeblood that is capital. So much so that this credit gap is thought to be $330 billion, the size of some countries’ GDP. 

Over two years ago, in July 2020, policymakers launched an effort to do well by the segment that uppity financial institutions ignored. The Open Credit Enablement Network, or OCEN, is a government-supported tech ecosystem where traders, shopkeepers or any minor business operator can get a loan after a quick basic check. 

OCEN, pronounced o-ken, is designed to be the “UPI of lending”, so disbursals by participating fintechs, NBFCs and banks are almost instantaneous. It’s a notable shift from the traditional process that subjects applicants to endless scrutiny.