Since 2000, Indian fintech Firms have received over $35 billion in the financing, with about $10 billion of it coming in 2021, primarily in the payments and lending sectors: Report
According to Rakesh Pozhath, partner at consulting company Bain & Company, India’s $50 billion fintech industry would encounter challenges in the form of more regulatory oversight and reduced liquidity, raising the cost of capital for some businesses in 2019.
As global financial conditions tighten, investors in the nation’s fintech sector, which has attracted heavyweights like Masayoshi Son’s SoftBank Group Corp. and Warren Buffett’s Berkshire Hathaway Inc. in recent years, are becoming more cautious. According to Pozhath, this has made it more difficult to obtain money.
Smaller fintech startups businesses that want to transition into non-banking organizations so they can continue lending to customers may see a higher cost of capital as a result next year, he said.
According to a recent research co-authored by Pozhath, Indian fintech, primarily in the payments and loans arena, have drawn over $35 billion in the capital since 2000, with about $10 billion of that coming in 2021. The $4.2 billion in fundraising during the first half of 2022 was less than it was a year earlier, according to the study.
Due to incidents of fraud and malpractice in the fintech lending sector this year, the Indian government increased its scrutiny to regulate it through a set of guidelines, pushing platforms to reconsider their business models, according to Pozhath.
The risk and compliance divisions will receive significant funding, according to Pozhath.
