- India has emerged as a global fintech super-power and is now ranked no. 3 in terms of total fintech companies
- Indian Fintech Market is expected to cross USD 1+ Trillion by 2030
- Payments, Digital Lending, WealthTech, InsureTech, Neobanking offers a huge opportunity for investing
- OCEN & ONDC are expected to trigger the next leg of growth in the fintech ecosystem
Mumbai 13, 2023: IIFL Fintech, a leading financial services company, launched a report on the Indian fintech sector. The report gives us a deep understanding of many fintech domains such as Payments, Digital Lending, WealthTech, InsureTech and Neobanking. According to the report, Indian fintech sector has grown rapidly in recent years, with total funding reaching $39 billion in 2022. However, the report also notes that funding declined by 40% in 2022, due to a number of factors, including the global economic slowdown and the war in Ukraine.
The Indian startup ecosystem is expected to see another record year in terms of the number of ventures receiving private capital. While big late-stage investors are staying on the sidelines due to the derating of the global tech sector and the caution of investors in new domains such as cryptocurrency and metaverse, the early-stage ecosystem is buzzing with activity.
Key Highlights –
- The country’s payments landscape is set to grow with transaction numbers likely to top $100 trillion by 2030
- The digital lending market is expected to grow to a whopping $515 billion by 2030.
- The book size of Indian digital lending companies is set to grow from $38.2 billion in 2021 to nearly $515 billion by 2030, a 33.5% increase in CAGR
- Indian wealth-tech companies are likely to grow from $20 billion in 2021 to a whopping $237.4 billion by 2030, at a compounded annual growth rate of 31.6%.
- The InsureTech sector in India is expected to be worth as much as $88 billion by 2030, at a CAGR of ~33.7%.
- The Indian neo-banking sector recorded a five-fold increase in funding in 2021, and the sector is expected to be worth $215 billion by 2030 at a CAGR of ~20%.
- The volume of PPI transections has grown from 493.92 crore in FY21 to 658.12 crore in FY22 and 746.67 crore in FY23. The total value of PPI transactions rose to Rs 2.94 trillion in FY22 from Rs 1.98 trillion in FY21, before recording a dip to Rs 2.87 trillion in FY23.
Commenting on the report, Ms. Mehekka Oberoi, Fund Manager, IIFL says, “Indian fintech industry have come a long way from the mid-1990s when online banking services were first introduced. The fast adoption of the mobile phone coupled with cheap Internet access has meant that masses in India have taken to payment apps and on-tap credit solutions. Today, these Fintechs have become a “one-stop shop”, addressing shortcomings of the traditional financial services industry on one hand, and innovating to create superior experiences. To update the investors with the latest developments in the fintech ecosystem, providing them with insights into the trends, opportunities, challenges and way ahead, IIFL have launched this report.”
The Indian fintech industry seems to have taken the RBI guidelines in its stride as suggested by the disbursement data for the third quarter ended December 31, 2022. Data released by the Fintech Association for Consumer Empowerment, or FACE, shows that disbursements grew 118% year over year and 2% sequentially to Rs 18,537 crore in the third quarter of FY23 in terms of value. In terms of volume, the growth was 147% year over year and 6% sequentially.