Funding support under Start-up India drives industry growth
The Fintech market in India is expected to expand at a compound annual growth rate (CAGR) of ~24.56% between 2021 and 2026 to reach ~Rs.8.35 trillion by 2026, propelled by the increased penetration of the internet and smartphones, and a rise in partnerships between fixed service incumbents and fintech companies, says a report by ResearchAndMarkets.
It was Rs.2.30 trillion in 2020, said the “Fintech Market in India 2021” report released 15 Oct 2021.
Furthermore, the market growth is driven by funding through the Start-up India initiative, financial inclusion and enablement, tax and surcharge relaxation, and financial support to promote digital payments.
Funding support by the Indian government under the Start-up India initiative, financial inclusion and enablement, tax and surcharge relaxation, and financial support to promote the use of digital payments have also propelled the industry’s growth.
Major economic interventions such as demonetization, promotion of digital payments through the Digital India initiative, and cashless economy movements have fueled the use of Fintech.
Fintech is one of the highest-growing technology segments in India, bringing innovation in various applications including loans, payments, stock trading, and credit scoring. As of 2020, India accounted for the highest Fintech adoption rate (87%) and is the biggest destination for investment deals worldwide.
Within the country, some of the top Fintech destinations are Mumbai, Gurugram, Bengaluru, New Delhi, and Hyderabad. Mumbai and Bengaluru together represent ~42% of the fintech hub in India.
However, complex regulatory and compliance laws, concerns regarding data security, and threat of cybercrime are a few of the factors that impede growth, said the report.
The Fintech market has benefited from the pandemic. With the onset of the pandemic, the Fintech sector became the forefront of the country’s financial inclusion struggle. The adoption of digital payments and lending surged. The market witnessed ~40% rise in the number of digital transactions amid the lockdown, said the report.
Owing to the fear of public gatherings, people started shifting from traditional financial methods to cashless and digital methods of payment. The InsurTech segment experienced significant growth as people increasingly adopted life and health insurance. The market is expected to develop substantially with the surge in digital payments other financial technology solutions.
Major players operating in the market include: PhonePe Private Limited, One97 Communications Limited (Paytm), One Mobikwik System Private Limited (Mobikwik), ET Money, Ezetap, Freecharge Payment Technologies Private Limited, Mswipe Technologies Private Limited, One Mobikwik System Private Limited, One97 Communications Limited, PhonePe Private Limited, Pine Labs Private Limited, PolicyBazar.com and PayU Payments Private Limited. #investment #banking #technology #digital /fiinews.com
