India Fintech Market Set to Witness Explosive Growth: Forecast to Grow at a CAGR of 15.5% by 2027
Published | 01 January 2022
Among emerging markets, India leads in the adoption of financial technology. The fast pace of digitization is driving India's fintech market to grow rapidly. Additionally, the growth of the country’s fintech sector is also aided by government initiatives that provide incentives and financial support to startups….
A recent study conducted by the strategic consulting and market research firm, BlueWeave Consulting, revealed that the India fintech market was worth USD 53.5 billion in 2020. According to the study, the market is estimated to grow at a CAGR of 15.5%, earning revenue of around USD 147.6 billion by the end of 2027. India fintech market is proliferating at a high rate because of the rapid digitization and various government initiatives to boost the fintech sector by offering incentives and financial support to startups. Moreover, the increasing adoption of fintech across various sectors, such as investment management, retail banking, education, and nonprofit fundraising, is providing growth opportunities to the India fintech market. Nonetheless, poor Internet connectivity and an unbanked population in India may restrict the growth of the market during the forecast period.
India Fintech Market is Predicted to Grow with Government Initiatives aimed at Boosting the Sector
There is a great Fintech ecosystem in India, which includes the PM Jandhan Yojana, Unified Payment Interface (UPI), and Digi-lockers. The central and state governments are taking various initiatives to capitalize on the opportunities that the fintech sector of India offers. A number of government initiatives, such as Digital India and Make in India, are propelling the adoption of fintech services. Additionally, the Government of Maharashtra has established the Mumbai Fintech Hub in the Mumbai Metropolitan Region as an investment platform to promote the fintech ecosystem in Maharashtra. The government is also drafting policies to focus on infrastructure and incentives for fintech to turn Mumbai into a global fintech hub.
Emergence of Leading Fintech Startups and Companies Anticipated to Drive the Market Growth
According to Invest India, the National Investment Promotion and Facilitation Agency, there are more than 2,100 Fintech companies in India, out of which over 67% have been set up in the last five years. Furthermore, around seven fintech startups, including BharatPe, Ofb Business, CoinDCX, Chargebee, etc., have gained unicorn status in India in 2021 alone. Several fintech companies such as Paytm, Shiksha Finance, Lendingkart, Policybazaar, etc., are already dominating the market with their wide range of services. With an increasing number of fintech companies and growing competitiveness among them, the India fintech market is anticipated to flourish during the forecast period.
India Fintech Market - By Deployment
Based on deployment, the India fintech market is categorized into on-cloud and on-premise. The on-cloud deployment segment accounts for the largest market share as it allows companies to store and manage large amounts of data in a secure and trusted way and enables on-demand remote accessibility. Additionally, the cloud deployment segment is also catching up as it reduces costs since businesses only pay for what they use since they don't have to configure and maintain hardware and software. This is particularly beneficial to small and medium-sized businesses. The Indian fintech companies are increasingly investing in Amazon Web Services (AWS) and other cloud offerings for their deployment purposes, which is further boosting the market’s growth.
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India Fintech Market - Regional Insights
Geographically, the India fintech market is segmented into North India, South India, East India, and West India. Among these regions, the Southern part of the country dominates the fintech market. Additionally, the Northern and Western India also contributes to a significant share in the market with Mumbai having 428 fintech startups and Delhi and Gurugram registering 196 and 116 fintech startups respectively. Mumbai being the financial capital of the country recorded significant growth in fintech adoption due to the high literacy rate and better internet connectivity.
Impact of COVID-19 on India Fintech Market
The India fintech market witnessed tremendous growth after the COVID-19 pandemic outbreak. The unprecedented times have led businesses, especially small and medium-sized enterprises, to invest heavily in adopting digital financial services to keep up with changing market scenarios and consumer behavior. Moreover, due to the boom in the e-commerce industry, money transfer and payment services registered the largest growth in their market. Fintech services currently help businesses upgrade their business models in light of the new normal. Such benefits of fintech services are projected to boost the market in the post-COVID-19 period.
The leading players in the India fintech market are Lendingkart Technologies Private Limited, MoneyTap, Instamojo, Razorpay, Paytm, PolicyBazaar, Shiksha Finance, PineLabs, ZestMoney, ePayLater, and other prominent players.
The market is highly consolidated and dominated by a handful of industry participants, such as Paytm, PolicyBazaar, Razorpay, etc. However, several other startups, such as Slice and ZebPay are emerging with great potential and are giving tough competition to the established players. The companies constantly launch new products and services to expand their product portfolio and diversify their consumer base. Furthermore, the adoption of competitive strategies, such as partnerships, mergers, acquisitions, collaborations, etc., is also prominent in this market.
The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the India fintech market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the India fintech market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyses the growth drivers, challenges, and competitive dynamics of the market.
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