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Home / News / India /  Open Credit Enablement Network to launch through ‘Sahay’ app by September

Bengaluru: Open Credit Enablement Network (OCEN), the new credit protocol infrastructure announced by Nandan Nilekani, co-founder and non-executive chairman of Infosys Ltd earlier this week, will be launched through an app called ‘Sahay’, by September, according to two individuals aware of the matter.

An organisation by the name CredAll has also been set up to ensure the implementation of the OCEN, and will look at giving access of this new protocol to industry participants, said the people mentioned above.

This is similar to the umbrella body DigiSahamati Foundation (or Sahamati) which was created to operate the Account Aggregator (AA) model in the country.

The release of ‘SAHAY’ app is also similar to the launch of BHIM UPI, which was an app to further the use-case of Unified Payments Interface (UPI) in the country, launched by Prime Minister Narendra Modi in 2016.

Close to 30 customer-facing entities, across segments of - tax and legal filing apps, neo-banks, khata app companies, payment gateways, agri-tech companies, supply chain financiers are looking to become Loan Service Providers (LSPs), and adopt this protocol.

Under these new credit rails, OCEN will act as a common language, connecting lenders and marketplaces to utilise and create innovative, financial credit products at scale.

Under this new credit paradigm, Account Aggregators which will be using these APIs (Application Programing Interface) to embed credit offerings in their applications will be called ‘Loan Service Providers’.

The Sahay app will have lending partners such as State Bank of India, HDFC Bank Ltd., ICICI Bank Ltd., IDFC First Bank Ltd., Axis Bank Ltd. and Bajaj Finserv Ltd. for this new credit rail, where merchants can sign-up and get instant loans from lenders by providing their GST identification number, along with their bank details.

Along with this, merchants will also have to set up a collection mandate, through UPI’s ‘AutoPay’ feature, or other collection mechanisms, before the loan is disbursed.

Currently, the invoice-discounting used-case, where a merchant can receive loans against outstanding invoices is ready for implementation.

“We have reached a point where OCEN is ready for invoice discounting used cases, so there is no wait. A few more pieces have to fall in place. Invoice discounting is ready," said Sharad Sharma, co-founder of iSpirt Foundation, as a part of the first virtual open house session on OCEN.

“Our goal in the next 2 years is that we have to enable lending so that even a hawker will be able to take an intraday loan in the morning and pay it back by evening […] The informal economy should be able to come into the formal system and enjoy the convenience and benefits of the same," added Sharma.

At present, OCEN is running pilots across the country and has partners like IDFC First Bank and Bajaj FinServ onboard, according to the sources quoted about.

Startups like JusPay and OkCredit are also a part of the pilots, sources added.

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