India is a giant melting pot of new and existing fintech companies with the potential for staggering growth in the next few years. Already, transaction value in the fintech market amounts to USD 44,068m. This figure is predicted to show an annual growth rate of 20.2% per year in the next 4 years resulting in a total amount of USD 91,999m in 2021.
India is generally ripe for the kind of innovations that occur in fintech. The democratization of finance in a country with a population of more than 1.3 billion means opportunities for small businesses and individuals who would not have secured a foothold in the old financial world. Ideas like peer-to-peer lending and microfinancing thrive in this environment. Indeed, some of these original concepts were conceived in countries like India when it became clear that the old systems could not meet the local challenges.
Fintech Reviews – What to Watch Out for In India
The biggest contributor to India’s fintech portfolio is digital payments, with a transaction value of USD 43,831m in 2017. WhatsApp have already made moves towards capitalising on this by initiating the early stages of an exploration into allowing peer-to-peer transactions to take place through its network.
This will concern some businesses. Already, 67% of companies in India fear some sort of threat from fintech companies. Fintech companies are seen as disruptive and, in some cases, this is viewed as a positive influence while others prefer the status quo. Around 84% of companies now say that they have put disruption at the heart of their fintech strategy.
Fintech Reviews – What is India’s Strategy?
The Bank of India has thrown its support behind entrepreneurs with the launch of several new schemes designed to fund start-ups in fintech. The finance industry has so long relied on well-established companies that there hasn’t been much precedent for the growth that it is now seeing.
The Bank of India is committed to promoting local growth rather than leaving the market wide open to be cornered by multi-national giants like Google and WhatsApp. Investing in the brightest young innovators could be a big risk but the potential rewards of tapping such a huge social base seems to be worth it.