One of the fastest growing FinTech markets in the world, India ranks the highest in the FinTech adaptation rate amounting to 87%; a number that is significantly higher than the global average rate of 64%.
India has transpired as a global FinTech giant with digital payments valued at $65 billion expected to grow at a CAGR of 20% till 2023. Indian FinTech market’s overall transaction value is estimated to increase from $65 billion in 2019 to $140 billion in 2023.
With investments amounting to $286 million approximately, India has overtaken China as Asia’s top FinTech funding target. India’s investments of around $286 million were spread across 29 deals as compared to China’s investments of $192.1 million spread across 29 deals in Q1 of 2019.
The rapid growth of Indian FinTech markets can be attributed to the following:
Highest FinTech adoption rate globally
2nd highest funded sector (after E-commerce)
3rd largest FinTech ecosystem globally
The Indian FinTech industry consists of 4 major segments- WealthTech, Payments, Lending, and InsureTech.
The WealthTech Industry is India has witnessed a rapid growth thanks to factors like growing personal wealth, increased penetration of mobiles and digital channels, and reduced unevenness of information between small & large financial institutions and investors.
In terms of digital payments, India has made significant progress. India’s first real-time payment systems ‘IMPS’ was introduced in 2010 and UPI was introduced in 2016. Currently, there are 375 Payment startups in the country out of which 50% startups are digital wallets, gateways, mobile POS sub-segments.
When it comes to consumer credit, it is more probable that the urban population will leverage FinTech lending services in order to avoid heavy documentation, and the rural population can benefit from alternative credit scoring methods to avoid loan sharks.
Currently, there are 110+ InsureTech start-ups operating in India.
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