India FinTech Report


• India currently has around 2174 FinTech startups, with 42% in Mumbai and Bengaluru. Maharashtra has its own FinTech policy

• 2015 to June/2020 saw phenomenal growth in new startups across Payments, Lending, Wealth, and others; facilitated by:

— Solving for identity in the form of Aadhaar for formalization
— Getting everyone a bank account via PMJDY, to store money
— Scalable platform(s) to move money, like IMPS, UPI, BBPS, etc.
— Allowing banks, FinTechs and wealth/insurance/lending players to access platforms like UPI, GSTN & DigiLocker to innovate
— Aadhaar based due diligence and DigiLocker have reduced user onboarding costs and increased inclusion

• With FinTech segments like payments and digital lending getting overcrowded, investors’ interest has shifted towards India’s Neobanking

• Access to more data for credit scoring such as transaction, behavior, app-based data, location information, social data, etc. has created new lending models increasing the threshold up 10–15%, from the earlier number of ~25 to 40% of the loan application approvals

• Current insurance penetration is quite low, i.e., 2.76% in life insurance and 0.93% in non-life insurance compared to the global average of 6.5%

Source: Executive Summary of the India FinTech Report 2020 by GoMedici

By Vivek Jain

Analyst at Axis Bank