An oce(a)n of opportunity: anatomy of a lending protocol to lift the bottom of the pyramid

Concept by Abdul Shafiq

Synopsis

Formal financing is only available for a portion of MSMEs. The Open Credit Enablement Network or OCEN wants to democratize access to credit. The pandemic is forcing a paradigm shift in age-old lending practices, moving from a balance sheet-based approach to a cash-flow-based approach. However, the big players are still waiting on the fence, as the incentives to engage with the bottom of the pyramid are weak.

Remember how Tim Berners-Lee and his team at CERN shaped the future of the internet with HTTP, or how cumbersome landlines gave way to cellphones, or more recently what UPI did to digital payments ? Switch to a new ecosystem now, which will lend to those who otherwise struggle to get it. For, India is shaping a new credit protocol, which will ensure the provision of last mile credit to individuals and businesses at the bottom of the pyramid.

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