1. The Fintech Landscape
1.1 Please describe the types of fintech businesses that are active in your jurisdiction and the state of the development of the market, including in response to the COVID-19 pandemic and ESG (Environmental, Social and Governance) objectives. Are there any notable fintech innovation trends of the past year within particular sub-sectors (e.g. payments, asset management, peer-to-peer lending or investment, insurance and blockchain applications)?
India has a range of active fintech businesses operating across areas such as lending (credit), payments (both peer-to-merchant (P2C) and peer-to-peer (P2P) transfers), investments and trading, personal finance and wealth, credit ratings, insurance, regulation, etc. With over 2,000 recognised fintech startups, India is among the fastest growing fintech markets in the world, with the industry expected to be valued at around USD 150 billion by 2025. In the Financial Year that went by, the fintech sector in India has seen funding of USD 8.53 billion (in 278 deals). Up until the last quarter of the last financial year, India recorded over 23 billion digital payments worth INR 38.3 lakh crore (~USD 475 billion). As a result of this current and estimated growth, it is believed that digital payments (non-cash) will constitute a majority of all payments by 2026 – although such reports and trends are often prone to hyperbole and best taken with several pinches of salt. While domestic players (some of which have foreign investment) dominate the fintech industry in India as of now, the last few years have seen several foreign players enter the field as well – a trend that is expected to continue. With increasing internet penetration among the Indian public and some (questionable) policy changes having indirect consequences for the sector, fintech in India is looking at a period of compounding growth over the coming years – particularly (though not exclusively) in the payments sector, as also supported by the stats above.