Open Credit Enablement Network (OCEN)

The Open Credit Enablement Network (OCEN) is an open, digital framework intended to modernise the origination, distribution, and servicing of credit in India. It is based on standardised application programming interfaces (APIs) that allow multiple participants in the lending ecosystem to interact seamlessly. In the context of Indian banking and finance, OCEN represents a shift towards interoperable, consent-driven, and technology-enabled credit delivery, with particular importance for micro, small and medium enterprises (MSMEs) and individuals who remain underserved by traditional lending models.
OCEN is not a financial institution, lending platform, or regulatory body. Instead, it provides common technical and process standards that enable customer-facing digital platforms and regulated lenders to collaborate efficiently. The framework aligns with India’s broader digital public infrastructure initiatives, which aim to improve access to formal finance by combining digital identity, electronic payments, and secure data sharing.

Concept and objectives of OCEN

The central idea behind OCEN is the <u>unbundling of the credit value chain</u>. In conventional lending models, banks and non-bank financial companies (NBFCs) manage all stages of lending, including customer acquisition, underwriting, disbursal, and servicing. OCEN separates these functions by allowing specialised digital platforms to manage borrower interaction and experience, while regulated lenders focus on credit assessment, pricing, and balance-sheet risk.
The key objectives of OCEN include expanding access to formal credit, reducing loan processing time and costs, supporting small-ticket and short-tenor loans, enabling cashflow-based lending, and encouraging innovation and competition within a regulated environment. By standardising interfaces and workflows, OCEN seeks to make credit delivery more efficient without weakening regulatory safeguards.

OCEN within the Indian regulatory and financial system

OCEN operates entirely within India’s existing financial regulatory framework. All lending activity under OCEN remains subject to oversight by the Reserve Bank of India, which regulates banks and NBFCs and prescribes norms related to customer protection, disclosures, risk management, and data security.
A defining feature of OCEN is its reliance on consent-based data sharing. Borrowers explicitly authorise the use of their financial data for specific purposes and durations. This allows lenders to use verified digital data—such as transaction histories and cashflow records—to assess creditworthiness more accurately, particularly for borrowers who lack formal financial statements or collateral.

Architecture and participants in the OCEN framework

OCEN defines a common structure for interaction among multiple participants in the lending ecosystem:

• <u>Regulated lenders</u>, including banks and NBFCs, which provide funds, determine credit terms, and carry the credit risk.
• <u>Customer-facing digital platforms</u>, such as e-commerce platforms, accounting software, merchant applications, or gig-economy platforms, which embed credit offers within their existing user journeys.
• <u>Loan facilitation and servicing entities</u>, which assist with onboarding, documentation, repayment management, and customer support under agreed responsibilities.
• <u>Consent-based data-sharing mechanisms</u>, which enable secure and purpose-limited access to borrower financial information.

Standardised APIs reduce the need for custom integrations between each lender and platform, enabling faster scaling of digital credit products across sectors.

Credit lifecycle under an OCEN-enabled model

An OCEN-enabled credit journey typically begins with the borrower encountering a contextual credit offer within a platform they already use for business or work. After reviewing the terms, the borrower provides digital consent for data sharing. The lender then evaluates eligibility using the consented data and generates a credit offer with defined pricing, tenure, and repayment conditions.
Once the offer is accepted, documentation, mandate setup, and disbursal are completed digitally. Repayments and servicing are managed through standardised workflows, allowing lenders to monitor performance efficiently and address delinquencies in a timely manner. This digital lifecycle significantly reduces turnaround times and supports repeat and revolving credit use cases.

Implications for banking and financial intermediation

OCEN has the potential to reshape traditional banking intermediation. By enabling embedded credit distribution, lenders can reduce customer acquisition costs and reach borrower segments that are difficult to serve through branch-based models. Access to granular and timely data enhances underwriting quality and ongoing credit monitoring.
The framework also supports a gradual transition from collateral-based lending towards <u>cashflow-based lending</u>, especially for MSMEs. By aligning credit products with real business cashflows, lenders can design more flexible and responsive working capital solutions.

Significance for MSMEs and the Indian economy

MSMEs play a critical role in employment generation and economic growth in India but continue to face structural credit constraints. OCEN can help bridge this gap by enabling quicker access to formal credit, improving liquidity management, and supporting business expansion. Enhanced credit access can also encourage greater digital adoption and formalisation among small enterprises.
At the macroeconomic level, widespread adoption of OCEN can contribute to improved financial inclusion, greater efficiency in credit markets, and more resilient economic growth. Lower transaction costs and better risk assessment can support sustainable expansion of credit without proportionate increases in systemic risk.