The latest KPMG-CII report noted that Fintech has seen huge developments in the past few years, impacting varied industries and the common people in multiple ways.
The 'Fintech and Start-ups Fueling India's USD 5 Trillion Economy' report, which was jointly prepared by CII and KPMG, was recently released at 18th edition of CII Connect 2019 at Chennai. It noted that fintech has seen huge developments in the past few years, impacting varied industries and the common people in multiple ways. However, building a new-age financial framework in a country with diverse linguistic and demographic diversity can be daunting.
According to Arvind Gupta, Partner and Head, Management Consulting, KPMG, all stakeholders, ranging from banks, fintech companies and financial services firms to government regulatory institutions and value-added services, must come together to address existing challenges and find rewarding ways to ensure inclusive growth through innovative services and products.
Some recent fintech innovations in India include the tamper proof e-Stamp with its unique identification number, the e-Way bill - a compliance mechanism for goods movement, the Government e-Marketplace (GeM), Trade Receivables Discounting System (TReDS) that facilitates MSMEs to receive payments from corporates through e-banking, GSTN for checking claim on input tax credit and Bharat Bill Payment System, an integrated and interoperable bill payment system where customers can through a network of registered agents through multiple payment modes.
Dr. K K Raman, Partner and Head, Business Excellence, Chief Knowledge Officer-Advisory added that there is now a need to supplement these initiatives with strong policy measures that enable their adoption at scale rather than just be fragmented, siloed success stories.
In its report, 'Financing India’s MSMEs - Estimation of Debt Requirement of MSMEs in India', IFC noted that India’s current credit gap is around INR 16.6 lakh crore. Majority of these are small-ticket loans sought by new to credit customers or people from rural towns, who are either unserved or underserved by traditional financial companies. Fintech startups are trying to bridge this credit gap by offering flexible loans. They are combining low-cost digital payment modes with innovative delivery models and data science to assess creditor's creditworthiness to avoid payment defaults.According to Suresh Raman, Chairman, CII Connect 2019, a push towards entrepreneurship by way of 'Make in India', 'Start Up India', tax relaxation, building infrastructure of incubators and accelerators encourages innovation. Now, a combined effort from all players of the startup ecosystem is needed to help Indian economy touch the $5 trillion mark within five years.