Fintech start-ups can lead the way to India’s financial inclusion
India is changing into an effervescent ecosystem offering fintech lending start-ups a platform to potentially grow into billion-dollar unicorns. Although relatively young at present, the sector is escalating rapidly, fueled by the large innovation-driven start-up landscape, and responsive government policies and regulations.
The year 2016 has witnessed major technology changes in the country’s financial services industry. The traditionally cash-driven Indian economy was seen responding well to the fintech opportunity, primarily generated by an upwelling in e-commerce, and smartphone penetration. Fintech firms have been trying to modify the small business lending market by using technology to simplify the lending process and increase transparency.
Unlike banks and NBFCs, fintech lending platforms are using alternate data sources like social media footprints in addition to traditional sources to decide the creditworthiness of loan applicants. They are giving quick access to lending products through transparent loan processing wherein applicants can keep track of their applications at every stage along with a suggestive pricing. Thanks to such lending platforms, not just the salaried class but even Indian SMEs are seeing a better avenues for financing. The country’s SME lending market is worth about $300 billion today, and digital finance is expected to constitute at least 10% of it. Fintech firms can leverage this opportunity aggressively.