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Fintech & Financial Services

India has a diversified financial sector undergoing rapid expansion both in terms of strong growth of existing financial services firms and new entities entering the market. The sector comprises commercial banks, insurance companies, non-banking financial companies, co-operatives, pension funds, mutual funds and other smaller financial entities. 

The banking regulator has allowed new entities such as payment banks to be created recently, thereby adding to the type of entities operating in the sector. However, the financial sector in India is predominantly a banking sector with commercial banks accounting for more than 64% of the total assets held by the financial system.

 The Government of India has introduced several reforms to liberalise, regulate and enhance this industry. The Government and Reserve Bank of India (RBI) have taken various measures to facilitate easy access to finance for Micro, Small and Medium Enterprises (MSMEs). These measures include launching Credit Guarantee Fund Scheme for MSMEs, issuing guidelines to banks regarding collateral requirements and setting up a Micro Units Development and Refinance Agency (MUDRA). With a combined push by Government and private sector, India is undoubtedly one of the world's most vibrant capital markets.

  • The Indian Fintech industry’s Total Addressable Market is estimated to be US$ 1.3 trillion by 2025 and Assets Under Management & Revenue to be US$ 1 trillion and US$ 200 billion by 2030, respectively.

  • The Payments landscape in India is expected to reach US$ 100 trillion in transaction volume and US$ 50 billion in terms of revenue by 2030.

  • India's digital lending market was worth US$ 270 billion in 2022 and is expected to reach US$ 350 billion by 2023.

  • India is the 2nd largest Insurtech market in Asia-Pacific and is expected to grow by ~15X to reach US$ 88.4 billion by 2030; India is poised to emerge as one of the fastest growing insurance markets in the world.

  • The Indian WealthTech market is expected to grow to US$ 237 billion by 2030 on the back of a growing base of retail investors.

  • India will become the 3rd largest consumer economy by 2030, driven by a young population comprising 65% population below the age of 35 years

  • Digital adoption continues to be propelled by rural India – clocking an 8% YoY growth to 333 million internet users (37% of rural population). Rural consumption accounts for 45% of all data consumption in India. Now there are 7 Rural Internet Subscriber, for every 10 Urban Internet Subscribers.

  • India already has the 2nd highest number of smartphone users globally, and is the 2nd largest Internet user market

  • Mobile banking internet banking, neo-banking and rise in digital products and solutions by private and Government of India support: 93% digital payments (by volume) done via mobile (2021) and over 1 billion cards are in circulation

  • The growing importance of the NBFC sector in the Indian financial system is reflected in the consistent rise of NBFCs’ credit as a proportion to GDP

  • NBFCs continued to deploy the largest quantum of credit from their balance sheets to the industrial sector, followed by retail, services, and agriculture.