The technological revolution has impacted every corner of the globe, and India is no exception. India has emerged as a lucrative market for fintech and lending business ventures due to its population base of 1.3 billion, an evolving economy, and a desire to experience digital solutions.
The fintech adoption rate in India is 87%. It’s higher than the global average of 64%. The fintech market in India is fuelled by a tech-savvy youth population, with 75% of India’s population under the age of 45.
India’s fintech market is anticipated to touch the mark of $2.1 Trillion by 2030. India has more than 2100 fintech start-ups. About 33% of the fintech start-ups are operating in the lending sector.
Enterslice has supported the dreams of several aspiring fintech entrepreneurs and key players in a diverse range of industries. The brand has helped several entrepreneurs around the world in overcoming the challenges of regulatory compliance and streamlining business operations. Let’s dive into the world of Indian fintech and lending landscape and opportunities for lending in rural areas.
Take a Look at the Indian Fintech and Lending Landscape
All those who are set to enter into the fintech segment of India must be aware of the growth opportunities and potential that this segment holds for the future course of time. Today, the fintech market in India is one of the rapidly thriving sectors in the world. There are endless possibilities for those who are entering into fintech and lending landscape. Let’s uncover the significant reasons behind this exciting growth prospects-
Consumer Lending- Fintech firms play a crucial role in consumer lending. They are immersed in leveraging alternative data sources as well as advanced analytics to provide loans to different individuals with varied credit records. Buy-now-pay-later services, personal loans, and credit scoring innovations are climbing the ladder of popularity with each passing day.
Peer-to-peer(P2P) Lending- With an increase in the number of digital financial transactions, P2P Lending platforms are getting recognition among the masses for their speed, ease of use, and convenience.
Neobanks and Digital-only Banks- Many digital-only banks and Neobanks landed in the Indian market. These banks are involved in offering online-only banking services and providing assistance centred around low fees, user-friendly apps, as well as value-added features.
Small Business and MSME Lending- Fintech lenders are using technology in order to assess creditworthiness and provide customized lending solutions and support to this segment, which has encountered challenges accessing credit from traditional banks. They are immersed in addressing the credit gap for MSMEs.
Insurance-tech(Insurtech)- Technology is transforming the entire scenario for the insurance sector. Insurtech startups are streamlining the insurance purchase process and assessing risk and pricing with the help of data analytics.
Regtech and Compliance Solutions- With the consistency of regulatory scrutiny in the financial sector, regulatory technology solutions (Also known as Regtech solutions) are helping financial institutions adhere to regulations in an effective way. These solutions are helpful in minimizing the scope for non-compliance and streamlining compliance processes.
Robo-advisors and Wealth Management- Robo-advisors are receiving accolades from all fronts for providing algorithm-oriented investment advice along with portfolio management services. They are basically catering to high-net-worth individuals, offering a diverse range of investment options.
All the elements mentioned above are connected to a point to construct a fertile ground for fintech and lending companies aiming to make it big in India’s prolific trade. The future of the fintech industry in India seems brighter and better in the forthcoming period. Innovative trends in the sector are likely to bring a revolution.
Role of Non-banking Financial Companies (NBFCs) in India’s Fintech Sector
In the Indian fintech sphere, non-banking financial companies (NBFCs) are substantial players one can’t ignore. They serve as significant links between the finance sector and a vast network of consumers. Besides this, they are acting as intermediaries for borrowers and lenders. Due to the rising digitization efforts of the nation, the role of NBFCs in the fintech sector of India has grown tremendously.
Traditionally, non-banking financial companies have bridged the lending gap left by formal banking institutions. They are involved in offering loans, financial assistance, and credit facilities to the unbanked populations. However, with technological advancement coming into the picture, non-banking financial companies are rising much beyond the loan providers.
Technology and NBFCs are moving together in the same line, and that’s the need of the hour as well. Digital platforms are contributing to operational efficiency, facilitating wider customer reach, and enabling better lending models. Non-banking financial companies (NBFCs) are joining hands with fintech startup ventures, fostering a healthy, synergic relationship that gives wings to efficient and transparent financial services.
Rural India: The Market of Untapped Potential for Fintech Innovations
About 65% of the population resides in rural regions. The vast untapped potential of rural areas is yet to be explored. In recent years, the population of internet users in rural areas have increased beyond expectations, credit goes to cheap data plans and affordable smartphones. It has opened the door of opportunities for fintech apps and platforms to reach a territory where more users can be captured. It’s known that rural India is underserved by the traditional banking system. It resulted in a low level of formal credit penetration. It gives birth to an enormous market for online money lending platforms offering hassle-free and affordable credit services.
The unique and different nature of the rural Indian market demands changes and innovation. To grow and attain new heights in this space, fintech firms need to upgrade their business models. They have to make their offerings good enough to rule the hearts of rural consumers. Things look good and smooth, but the reality is far different. Fintech firms will come across a wide range of challenges in the journey of landing in the rural Indian market.
Despite the rising internet penetration, digital literacy stays on the low side. In order to ensure adoption, fintech firms need to create a simple and user-friendly interface. Since English and Hindi are not spoken in all the villages of the country, integrating local languages into the app will help in bridging the gap.
Forecasting What’s Next in Advance
In the Indian fintech space, the future of NBFC looks great and promising. As they make the most of digitalization and technological innovations, non-banking financial companies (NBFCs) have the capacity to speed up the game of financial inclusion. So, whether you are a startup eyeing the fintech sector in India or an investor seeking excellent opportunities, NBFCs undoubtedly present a wide range of opportunities for innovation.
