India’s fintech revolution not yet fully accessible to the country’s poor: Report

“So far, we do not see the impact of FinTech in India 3 except for a few companies like Kaleidofin, Ekofinancial services, Jai Kisan, GramCover, PayNearby and Aye Finance.
For representational purposes
For representational purposes

NEW DELHI:  The digital revolution in India has changed the nature of the financial services sector. The fintech era, which began sometime during 2010, has seen an explosive growth in the past five years with more than 80 per cent of the enterprises having been founded during that period.

India has second largest fintech ecosystem in the world now, after the US, according to the recently released India Fintech report. However, the report released by Nandan Nilekani raises some concerns on how widespread the benefits of this revolution have been. 

“So far, we do not see the impact of FinTech in India 3 except for a few companies like Kaleidofin, Ekofinancial services, Jai Kisan, GramCover, PayNearby and Aye Finance. Most startups do not operate in that segment. While we have made significant progress in formalization with digital ID and the ability to transact (access) with the ID and payment rails, we must bring the costs down using technology and create incentives (and financial education) for India 3 to use digital money and FinTech,” the report noted.

The report notes, howeverm that UPI has unarguably pushed the country faster towards digital payments adoption. According to a report released by the Payments Council of India (PCI) and PriceWater House Coopers (PWC) at the Global Fintech Fest, UPI has now reached 1 billion transactions every month, growing at a Compounded Annual Growth rate (CAGR) of 785 per cent in volume and 570 per cent in terms of value from financial year 2016-17 (FY17) to FY20. UPI transactions are expected to reach nearly  59 billion in volume by 2023 owing to its high ( Peer- to- Peer) P2P type of transaction penetration, the report added. The pandemic has only accelerated the trend. 

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