BENGALURU: Fintech funding in India has recorded a 3x jump in 2021, and over $1 billion in investments were made in digital lending. The digital lending market is expected to grow to $515 billion in book size by 2030, said a report by Chiratae Ventures and Ernest and Young (EY).
The report highlighted that in the future, co-lending will emerge as a marketplace model that supports lending partners to mitigate their risk exposure. Easy market entry and targeted loan offerings due to the availability of large sets of customer data are major growth drivers of digital lending.
It also said the Indian fintech market is expected to record a 10x growth and achieve $1 trillion in Assets Under Management (AUM) and $200 billion in revenue. Titled ‘$1 Tn India FinTech Opportunity’, the report said India is the largest fintech ecosystem and is home to 21 fintech unicorns. P2P lending, SME financing and short-term credit models are gaining strong momentum. BNPL (Buy Now, Pay Later) is revolutionising B2B credit and adding significant value to the B2B e-commerce space. BNPL contributed to 37% of retail digital lending banks by volume in FY20.
“Digital currency, using blockchain and other technologies, is planned to be issued by the RBI, starting 2022-23. However, CBDC (Central Bank Digital Currency) is yet to be introduced and its significance in payments will evolve over time,” it said. Sudhir Sethi, founder and Chairperson, of Chiratae Ventures, said, “Indian fintech market has been a formidable global force, contributing to the largest share of unicorns in India.” Global metaverse is still nascent with a significant runaway ahead, fintech firms have started to innovate to tap into business opportunities exploring various use cases. New asset classes, crypto and NFT will also continue to attract investor interest as fintech firms continue to solve for traditionally underserved customers, the report added.
P2P lending, SME financing to grow
The Indian fintech market is expected to record a 10x growth and achieve $1 trillion in Assets Under Management (AUM) and $200 billion in revenue. P2P lending, SME financing and short-term credit models are gaining strong momentum