ULI is to credit what UPI is to payments—And India is ready for it
Since its debut in 2016, the Unified Payments Interface (UPI) has transformed India’s financial backdrop, changing the way millions transact daily. From professionals in cities to vendors in rural markets, instant app-based payments have brought accessibility, convenience, and trust, processing more than 185 billion transactions a year, which accounts for over 83.4% of all retail digital payments in FY 2024–2025.
Now, the Reserve Bank of India (RBI) is looking to replicate this success in credit. With the launch of the Unified Lending Interface (ULI), loan approvals that once took weeks of paperwork could soon be completed in minutes, opening a new chapter of financial inclusion and growth.
A key step has been the RBI’s effort to onboard Urban Cooperative Banks (UCBs) through the National Unified Credit Framework (NUCF) for digital co-lending. These community-focused banks, long pillars of local finance, often struggle with disjointed systems and limited technology adoption. By linking them to a standardized digital platform, the central bank is modernizing cooperative banking, ensuring that small borrowers, local business owners, and rural communities get timely access to formal credit. This enables UCBs to reach smaller towns, disburse loans faster, and adopt a truly digital-first approach, reducing reliance on unofficial lending channels.At its core, ULI is a centralized digital infrastructure that connects lenders, borrowers, and data providers on a single, interoperable platform. Standardized Application Programming Interfaces (APIs) allow consent-based sharing of financial and non-financial data such as land records, Goods and Services Tax (GST) filings, transaction histories, and Aadhaar verification.
- For borrowers: This means faster approvals, less paperwork, and loan offers better suited to their needs.
- For lenders: It means smoother processes, lower credit risk, and the ability to serve a wider customer base more efficiently.
By automating historically slow procedures, ULI speeds up loan evaluation and disbursal, reduces operating costs for lenders, and creates a transparent, reliable environment for borrowers. It also expands access to credit for individuals and businesses who previously struggled to prove eligibility due to a lack of official credit history or income documents.India’s lending system is overdue for disruption, and ULI provides the solution. Farmers, small enterprises, and rural borrowers often face weeks of delays due to fragmented data and paperwork-heavy approvals. ULI streamlines this by merging verified records and giving lenders real-time credit insights. Approvals that once dragged on for weeks can now happen in minutes. Richer data also helps reduce the need for collateral in small-ticket loans.
For example, an independent service professional or a small online merchant could instantly access a short-term loan to stock inventory, upgrade tools, or expand services, turning opportunities into growth without long delays. The result is faster, fairer, and more inclusive access to credit for millions.
By cutting turnaround times and easing collateral requirements, ULI empowers borrowers to make smarter financial decisions. It ensures that capital reaches those who need it most, driving flexibility, growth, and economic participation across India.
ULI also complements the existing JAM trinity (Jan Dhan-Aadhaar-Mobile banking) and UPI. While UPI transformed how money moves, JAM laid the foundation for financial inclusion. Now, ULI ensures that credit flows seamlessly to the very communities that JAM and UPI empowered. Together, this new JAM–UPI–ULI digital trinity creates an interconnected ecosystem where access, payments, and borrowing converge, thus, unlocking greater efficiency, inclusivity, and scalability in financial services.
The impact goes far beyond individual borrowers. Faster loans for farmers and small businesses enable timely investments, financial stability, and growth. For lenders, ULI provides better risk assessment and transparency. On a macroeconomic level, this infrastructure can boost entrepreneurship, strengthen financial literacy, and give Micro, Small, and Medium Enterprises (MSMEs) easier access to seasonal or working-capital loans. In partnership with government schemes and digital literacy campaigns, ULI ensures that people across India can access the funds they need to progress.
The success of UPI also shows why ULI must focus on strong backend systems, not just user-friendly interfaces. UPI scaled because its infrastructure was secure, reliable, and capable of handling millions of transactions daily. ULI will need a similar backbone for secure data exchange, real-time consent, and robust risk controls to protect borrowers’ information while enabling transparent credit decisions. Pilot programs with more than 30 banks and Non-Banking Financial Companies (NBFCs) have already proven its potential. The next step is full-scale adoption through collaboration on standardized APIs and risk frameworks.
A new financial era is beginning in India. ULI promises to revolutionize lending just as UPI redefined payments. By connecting regulators, fintech firms, and cooperative banks through a consent-driven, standardized framework, India is building an inclusive and secure credit system. More than just a technological advancement, the JAM–UPI–ULI trinity marks a pathway to financial inclusion, economic empowerment, and sustainable growth where credit becomes as fast, simple, and reliable as everyday payments for millions of Indians.
(This article is authored by Akshay Mehrotra, Co-Founder & Group CEO, Fibe. All views expressed are personal.)
- Published On Oct 26, 2025 at 08:00 AM IST
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