After revolutionizing the way Indians pay through the Unified Payments Interface (UPI), the Indian government is now gearing up to democratize credit access through its next ambitious initiative: the Unified Lending Interface (ULI). Positioned as a “UPI for credit”, ULI is expected to transform how loans are offered, sanctioned, and disbursed across the country.
What is ULI?
ULI, or Unified Lending Interface, is a digital public infrastructure (DPI) initiative developed by the Reserve Bank Innovation Hub (RBIH). It aims to make credit faster, more inclusive, and digitally accessible—particularly for underserved communities such as farmers, micro-enterprises, and gig workers.
Just as UPI allowed instant, interoperable payments via a common layer, ULI creates a plug-and-play architecture for digital lending, bringing together banks, fintechs, and government data sources in a seamless ecosystem.
Why ULI Matters: The Lending Gap in India
India still struggles with a credit access divide. According to industry estimates:
- Over 63 million MSMEs have unmet credit needs.
- 70% of rural borrowers rely on informal sources.
- Small farmers often face rejection due to lack of formal credit history.
ULI is designed to close this gap by giving lenders access to verified, consent-based data through APIs—drawing from sources like:
- Aadhaar and PAN
- GST filings
- DigiLocker documents
- Land records
- Bank statements
- Agri-input purchase and soil data
This enables instant borrower profiling and approval, even for individuals with no prior credit score.
Policy Push and Ecosystem Support
ULI enjoys strong support from key policymakers and institutions. RBI Governor Shaktikanta Das has referred to ULI as a “transformative tool” in India’s credit architecture, while RBI Deputy Governor T. Rabi Sankar called it “a digital public infrastructure of national importance.”
A national-level roundtable, co-chaired by Ministry of Finance Secretary M. Nagaraju, was recently held to push for state-level integration of databases and ensure smooth rollout. Several states and departments, including agriculture, rural development, and industries, have already begun aligning their data systems.
Real-World Impact: Faster, Smarter, Fairer Loans
ULI’s design offers transformative benefits:
- Faster approvals: Loan applications could be processed in minutes instead of weeks.
- Lower default risk: Rich, real-time data improves underwriting accuracy.
- Wider inclusion: First-time borrowers, women entrepreneurs, and gig workers gain visibility.
- Better compliance: Consent architecture ensures user control and data privacy.
For lenders, the advantages are equally compelling—reduced operational costs, automated KYC, and scalable loan origination systems without manual bottlenecks.
Looking Ahead: India’s Credit Stack Vision
ULI is the newest layer in India’s “Digital Stack,” following Aadhaar (identity), UPI (payments), DigiLocker (documents), and ONDC (e-commerce). Together, these platforms create a foundational digital infrastructure that is open, inclusive, and scalable.
Fintechs, NBFCs, and digital banks are expected to be early adopters of ULI. Startups working on AI-driven credit scoring, alternative data underwriting, and embedded lending will also benefit from ULI’s capabilities.
Final Takeaway
ULI has the potential to redefine India’s lending ecosystem the way UPI reshaped payments. By leveraging technology, data, and public-private collaboration, India is poised to unlock the next wave of financial inclusion and economic empowerment.
As the system matures, the true test will lie in execution at the last mile—where a farmer in Maharashtra or a woman entrepreneur in Bihar can access a loan with a few taps on her phone, not paperwork.
