Fintech must guard against excessive lending and short-term focus: CEA

Nageswaran urged the industry to ensure that no damage is caused to the savings, incomes and wealth of the consumers in a country like ours having low financial literacy.

Chief Economic Advisor V Anantha Nageswaran on Thursday exhorted the fintech industry to guard against excessive lending and short-term focus to ensure that the technological possibilities and product innovations deliver on their promise.

As it happens with any new device or tool, fintech holds immense possibilities, but there are challenges as well, Nageswaran reminded.

"The market participants, industry participants'¦(should) be cognizant of the challenges and the dangers that a potent combination of finance and technology together can pose to social stability, to the fortunes of the low and middle-income people and also to micro and small enterprises," he said, speaking at the ninth Global Economic Summit arranged by the World Trade Centre here.

Nageswaran urged the industry to ensure that no damage is caused to the savings, incomes and wealth of the consumers in a country like ours having low financial literacy.

Fintech providers will have to guard against "excessive lending and short-term focus" in order to ensure that the successes accrue, he added.

He said everybody understands financial literacy and its importance but seldom understands the practical implications, and hence, the onus is doubly higher on the industry.