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The launch of the Unified Lending Interface (ULI) has been met with enthusiasm from digital lenders who believe it will significantly expand their reach and enable them to serve a broader customer base, particularly in rural and semi-urban areas. The ULI aims to bridge the gap in accessing formal financial credit for individuals in these regions who may be financially active and have credit histories but lack the documentation preferred by traditional banks and financial institutions.
Jatinder Handoo, CEO of the Digital Lenders Association of India, highlights the significance of the ULI platform in streamlining and expanding fintech credit services. He emphasizes the potential for reduced turnaround times and ease of credit delivery, particularly for Micro, Small, and Medium Enterprises (MSMEs), by leveraging digital public infrastructure like Aadhar and UPI. This accessibility is expected to broaden the fintech credit market for both lenders and borrowers.
The core challenge addressed by the ULI lies in the fragmented nature of data required for credit appraisal. Information residing in separate systems with various entities such as government agencies, account aggregators, banks, credit information companies, and digital identity authorities hinders frictionless and timely lending processes. By unifying these data sources, the ULI facilitates rule-based lending decisions and improves the efficiency of credit delivery.
Ashish Goyal, CFO and co-founder of Fibe, echoes the positive impact of the RBI's initiative on both borrowers and lenders. He emphasizes the potential for quicker, hassle-free loans tailored to individual needs, catering to the preferences of a digitally savvy generation. The standardized and plug-and-play approach of the ULI is expected to promote uniformity and enhance the overall customer experience, making loans more accessible and transparent.
Source: Will expand market: Digital lenders hail launch of ULI