India has achieved the second spot globally with largest number of financial technology (fintech) startups, according to a report.
The first spot was booked by the United States leading the list.
With a total of over 2,000 fintech startups, 42 per cent of them are concentrated in Bengaluru and Mumbai followed by New Delhi, Gurugram and Hyderabad.
Among all fintech startups, the ones who had maximum share were payment companies, lending, insurance and personal finance management startups. Some significant names that have made an impact include Paytm, MobiKwik, Policy Bazaar, PhonePe, PayU, Kissht, Shubh Loans, Lending Kart and Faircent.
According to the report on Indian fintech ecosystem, there has been three-fold growth in the number of fintech startups during 2015-2018. Over 1,300 new startups were added to the base number of over 730 already in practice.
Shubh Loans, a mobile money lending startup, is making loans accessible to the underserved and unserved.
Monish Anand, Founder and CEO of the company, said: "Indian digital lending industry is poised to grow dramatically with a potential market size of 100 billion dollars by 2023, according to a BCG report. The advancements in technology and data science are further fueling fintechs to serve the credit deprived."
The credit behind this achievement should also be given to some of the innovative programmes launched by state governments. Founding of Mumbai Fintech Hub by the Maharashtra government and FintechVizag Valley by the Andhra Pradesh government is a testimony to the fact.
SVR Srinivas, Principal Secretary at Maharashtra's Directorate of Information Technology, said:"In one year, immense progress has been made by Mumbai Fintech Hub in catalysing the growth of fintech startups. Zone startups has been one of our accelerator partners from the beginning and events like Fintegrate has deepened our partnership in this journey."
The sector has attracted the attention of investors significantly. Ajay Ramasubramaniam, Director of Zone Startups India, said in a recent interview: "It is an interesting area for investors to look at as the insurance-tech startups are bringing the underserved population into the insurance fold through the digital channel."
"Existing companies are attracting customers by doing product bundling with successful categories that have a strong online presence in healthcare, travel, logistics and automobiles. Hence, the share of the insurance market has increased in the past three to five years."
Fintech startups have recently started taping the unmet demand from smaller cities and industries in terms of credit and financial guidance. These areas have humongous business growth prospects, especially looking at the deep smartphone penetration and information access.
Shubh Loans too is joining the bandwagon realising the potential in these cities. Monish says: "Shubh Loans is focused on serving the upwardly mobile workforce of SME clusters in India. Due to the limited reach of conventional lenders, Shubh Loans through its end-to-end digitisation and nimble setup is able to fulfill this credit supply crunch. We are projected to operate in SME clusters with a coverage potential of at least two crore employees by 2020."
According to NASSCOM, things will continue to look up with Indian fintech market potentially touching 2.4 billion dollars by 2020. To add to the ongoing momentum and scale heights, fintech ecosystem will have to innovate and specialise in key sectors. That seems most plausible and promising with intelligent automation, artificial intelligence and blockchain.
Co-existing and partnering with different sectors may also help create new possibilities for companies and customers.
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