MICROCAPITAL BRIEF: Sahmati Account Aggregator Platform to Allow Borrowers to Share Credit Histories Digitally with Microfinance Lenders in India

Four financial regulators in India recently began work on Sahmati, a digital account aggregator (AA) platform that is to allow loan applicants to encrypt their financial data and transmit it to lenders. Sahmati users will be able to share some or all of their credit history, income and tax payment history, and they also will have the option to revoke consent for further data sharing at any time. The organizations behind the effort are the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority of India (IRDAI) and the Provident Fund Regulatory and Development Authority (PFRDA).

Arundhati Bhattacharya, a former chairman and managing director of RBI, said, “The AA is a huge step forward because it places the user at the centre of the data ecosystem and gives her meaningful control over her data. With this, India will become a world leader in enabling consented data flows. I would urge financial service providers to embrace the AA model at the earliest because it will enable them to become extremely efficient in processing large data sets, provide better customer service and enable financial inclusion by lowering transaction costs and reducing the possibility of fraud.”

RBI has approved six firms to start building Sahmati: National E-Governance Services Limited (NESL), Computer Age Management Services (CAMS), Cookiejar Technologies, FinSec Account Aggregator Solutions, Yodlee Finsoft and Jio Information Solutions.

By Anna Gravois, Research Associate

Sources and Additional Resources

Business Standard article
https://www.business-standard.com/article/economy-policy/regulators-come-together-to-make-applying-for-loan-less-cumbersome-119072701089_1.html

RBI homepage
https://m.rbi.org.in

SEBI homepage
https://www.sebi.gov.in

IRDAI homepage
https://www.irdai.gov.in

PFRDA homepage
https://www.pfrda.org.in

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