Large underbanked population creates significant demand for credit, says ResearchAndMarkets
Embedded Finance industry in India is expected to grow by 43.1% on annual basis to reach US$6.90 billion in 2024, and by CAGR of 37.8% during 2024-2029, reaching US$34.32 billion at the end of five years.
This is the latest update from a ResearchAndMarkets report on “India Embedded Finance Business and Investment Opportunities Databook – 75+ KPIs on Embedded Lending, Insurance, Payment and Wealth Segments – Q1 2024 Update”. It was released on 20 May 2024 https://www.fintechfestival.sg/ .
Embedded finance https://www.indiafintech.com/forum/ is one of the fastest growing areas in the fintech industry, with a huge growth potential in a developing country like India, owing to the young population that is increasingly adopting new age technologies, said the report.
Embedded Finance has the potential to revolutionize the delivery of financial services in India. Embedded finance is expanding the availability of financial services in India. With embedded finance, individuals who were previously underserved or excluded from traditional banking services can now access financial products and services. Embedded finance is also improving financial inclusion in India by providing individuals with greater access to financial services ibef.org.
A large underbanked population creates a significant demand for credit. Fintech firms are addressing this gap with innovative lending solutions, including short-term loans and BNPL (Buy Now, Pay Later) services. Demand for embedded credit is expected to rise in smaller cities wto.org .
Providers such as KreditBee https://www.kreditbee.in/ and Pine Labs http://pinelabs.com are strategizing expansion into these areas, forging partnerships with stores and increasing their reach. Paytm, a major mobile wallet player, is leveraging its platform to offer BNPL, personal loans, and merchant loans. This trend is expected to continue with PhonePe potentially entering the consumer lending space soon.
In the mobility space, Ola Money http://olacabs.com embedded micro-insurance for cab rides covering theft or damage. This saw rapid adoption as it removed friction by bundling insurance directly with the cab booking experience.
Healthcare platforms like Practo https://www.practo.com/ also let patients finance medical bills or premiums via embedded lending. Such embedded finance improves access to critical services for those with irregular incomes.
UPI’s Dominance in India’s Payment Landscape: One of the most notable examples of Embedded Finance’s impact is seen in the rise of the Unified Payments Interface (UPI) in India https://www.npci.org.in/ .
As per 2024 UPI statistics, more than 260 million people uses UPI in India and 360 million UPI transaction are recorded per day. Fiinews.com
