New Delhi, July 21, 2025: In a major relief for individuals with low or no credit scores, the central government is set to launch a new digital lending system called the Unified Lending Interface (ULI). This innovative platform will bypass traditional credit scoring methods like the CIBIL score, making loans more accessible to millions of Indians, especially those in the informal sector.
What Is ULI? A Game-Changer in Digital Lending
According to an NDTV report, the Union Ministry of Finance, under the supervision of the Department of Financial Services (DFS), is developing ULI—a revolutionary digital lending interface designed to simplify, speed up, and democratize the loan approval process.
Unlike conventional systems that depend heavily on credit scores, ULI will evaluate borrowers based on behavioral and transactional data. This includes utility bill payments, GST filings, and other digital financial footprints. As a result, even individuals with no formal credit history will now have a fair shot at securing loans.
A Boon for Small Businesses, Farmers, and Informal Workers
The new lending model is particularly designed to serve those outside the formal banking system—such as street vendors, small shopkeepers, farmers, and domestic workers. These individuals often lack a CIBIL score but are regular with their bill payments. ULI aims to bridge this gap by offering them access to credit based on alternative data.
This shift could significantly empower underserved segments and promote financial inclusion across the country.
Government and RBI Accelerating the Rollout
The Reserve Bank of India (RBI) and various government departments are working closely to ensure the nationwide implementation of ULI. Banks and Non-Banking Financial Companies (NBFCs) have been instructed to integrate with the new platform at the earliest. Institutions that have not yet adopted ULI are being urged to join quickly.
Security and Transparency at the Core
ULI places strong emphasis on user privacy. No data will be accessed or shared without the explicit consent of the user. The entire system will operate under robust data protection and privacy regulations, aiming to build public trust and ensure transparency in digital lending.
Faster, Cheaper, and Paperless Lending
The platform is being developed with a tech-first approach, allowing all lenders to operate on a single digital interface. This will lead to faster loan processing, lower operational costs, and a reduction in paperwork. Importantly, it will also help lenders better assess credit risk, leading to more responsible lending practices.
The Bigger Picture
The introduction of ULI is a strategic move by the Indian government to broaden the scope of the formal banking system, make credit more inclusive, and leverage digital infrastructure to bring transparency and efficiency to the financial sector. For millions who were previously denied access to loans due to a poor or non-existent credit score, ULI promises a new financial beginning.