Micro and nano enterprises, also considered India’s economic engines, cannot realise their full potential in contributing to the economy due to their lack of access to formal, affordable credit. The Open Credit Enablement Network, or OCEN, is an upcoming digital architecture that promises to challenge this situation and shift how credit is offered to micro and nano enterprises.
Unlike traditional lending, OCEN’s model of extending credit is reliant on cash flows instead of physical assets, which it determines by leveraging financial digital trails, or information that these enterprises produce on a daily basis. OCEN promises to reorient flows of money, information, and people, so as to underwrite fast, small-sized and customised loans to micro businesses, stimulating possibility and progress.
However, an analysis of the digital context of nano entrepreneurs suggests that much groundwork is required before they can access, adopt and reap the benefits of the OCEN. Going forward, ecosystem actors will need to play a vital role in enabling access to affordable credit for segments who need it the most.
Authors: Asawari Luthra and Abhishek Modi, with support from Abhishek Yadav