What did Nikhil Kamath say about the lending equivalent of Zomato & Swiggy? Check his latest post | Mint

In a recently shared post on Linkedin, Zerodha’s co-founder and the younger of the two Kamath brothers – Nikhil Kamath – wrote about Unified Lending Interface (ULI) and how lending as a phenomenon can play a key role in scripting the growth of individuals.

While showering praises on ULI (Unified Lending Interface), Kamath said that it is a great step towards helping the entrepreneurial drive of India. He also said that ULI will bring a much bigger change than UPI (Unified Payments Interface).

He highlighted that access to credit for everyone is important to India’s growth aspirations. A good test of any regulation is whether it leads to increased activity in the shadow markets, it’s likely bad across industries.

Is taking a loan a bad thing?

He then cautioned people that he is not saying that taking debt such as personal loan is good but he goes on to say that there is no reward without risk. “The more I think about it, all rewards in life is a factor or risk, debt-taking ability is also risk,” he wrote.

How it can usher a big change?

While attempting to change the conservative mindset of Indians, where people adopt a cautious approach towards borrowing and lending, Kamath said that the approach was right in the past but with chancing societal dynamics, there is a need for more mature lending system.

The society has some deep-seated issues in so far as lending processes are concerned. These include complex credit systems, higher interest rates in informal credit sources, regional disparities and socio-cultural barriers.

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To battle with these, RBI has introduced the most efficient lending system known as ULI which is aimed to streamline and standardise the entire lending process.

What is ULI?

It is a system that connects banks, NBFCs, fintech companies, and microfinance institutions to ensure easy, transparent and inclusive access to credit for everyone regardless of their background or financial status.

When people can’t access formal loans from banks, they often turn to loan sharks who offer quick loans but at higher interest rates.

This traps many people in a vicious cycle of debt.

Besides, there is a trend of fake loan apps which promise easy loans with minimal paperwork but hidden charges which has further exacerbated the situation.

And this is where ULI steps in, simplifying the entire lending process by offering a single platform where borrowers can apply for loans from multiple lenders.

He drew an analogy of Zomato and Swiggy to say that ULI is their lending equivalent.

Just as these apps allow you to compare restaurants and prices, ULI allows you to compare loan offers, promoting transparency and fostering healthy competition, he wrote further.

Whether it is personal loans, business financing or micro loans, ULI simplifies the process of finding the best option, just as ordering your meal.

These are the ULI’s key features

1 Alternative credit scoring: ULI uses data from GST records, bank transactions, mobile payments and utility bills to access creditworthiness by passing the need for traditional credit scores.

2. Real time approvals: It ensures instant approvals for a range of purposes — be it medical needs, business opportunities or seasonal requirements.

3. Providing micro loans: ULI will enable lending for as small as ₹10,000.

4. Customised loan products: With advanced AI and data analytics, ULI tailors financial situations for diverse needs offering personalised loans rather than one size fits all model.