Introduction:
Startup India is a flagship initiative of the Government of India, intended to build a strong ecosystem that is conducive for the growth of startup businesses, to drive sustainable economic growth and generate large scale employment opportunities.
The explosion of fintech companies as startups isn’t surprising. Fintech is a booming industry that’s on everyone’s mind, especially investors. With more than 2,100 fintech companies and one of the highest fintech adoption rates in the world, India is a global fintech powerhouse, a position it earned thanks to pioneering digital infrastructure initiatives, a dynamic venture capital (VC) landscape, and favorable demographics, including a young, digital savvy population, and rising middle class.
Now, the first question arises as if what the term ‘startup’ is?
The term startup refers to a company in the first stages of operations. Startups are founded by one or more entrepreneurs who want to develop a product or service for which they believe there is demand. These companies generally start with high costs and limited revenue, which is why they look for capital from a variety of sources such as venture capitalists. Startup founders dream of giving society something it needs but hasn’t created yet—generating eye-popping valuations that lead to an initial public offering (IPO) and an astronomical return on investment.
To know more about Fintech startups, lets’ first understand the term, FINTECH?
Fintech, the word, is a combination of “financial technology”.
Financial technology (Fintech) is used to describe new tech that seeks to improve and automate the delivery and use of financial services. At its core, fintech is utilized to help companies, business owners and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms that are used on computers and, increasingly, smartphones.
Today we all have mobile banking and UPI banking on our phones, which helps us to do all our banking transactions at our fingertips from the comfort of our homes or any place. This was possible due to fintech startups like Paytm (which was titled as India’s most valuable startup).
Hike in Fintech Startups:
The Fintech segment in India has seen an exponential rise in funding over the last few years, investments worth more than $8 bn have already been witnessed across various stages of investment in 2021. In the view, India has world’s second biggest fintech hub with ~2,565 startups operatingcurrently, there were only 737 in 2014. India’s largest share from fintech startups is through ‘payments’ and is followed by lending, wealth tech, personal finance, insurtech, regtech and others.
India has seen tremendous growth on the Digital Payments front, as according to the RBI, digital transactions in India were worth Rs 4,371 crore in 2020-2021. In 2019-2020, the number was Rs 3,412 crore. Also, India is home to the highest number of real-time online transactions with 25.5 Bn real time payments transactions in 2020, and is ahead of US, UK and China combined.
Also the significant ground for such a hike is due to the Fintech revolution in India. It is the culmination of years of effort in laying the groundwork towards developing key enablers through important initiatives: Jan Dhan Yojana, Financial Literacy, E-RUPI and others, while have enabled FinTech players to build technology products to penetrate the large consumer-base in India.
Top Fintech Industry enabling financial inclusion in rural India:
Fintech startups brought a significant change in our economy and major changes to how we make payments. The payment system has changed the way we all conduct business. Here are some of the FinTech firms that are making headlines in the finance industry and reaching out to various markets with their unique financial solutions on enabling financial inclusion in rural India:
1. Ezeepay
Established in 2018 by Shams Tabrej, Rashid Ali, and Dilkash Ara, Ezeepay is a fintech startup that focuses on serving the rural sector. It aims to solve the under-penetration of financial services in rural India. It currently works in Uttar Pradesh, Bihar, Madhya Pradesh, and Jharkhand,and is seeking to expand into South Indian markets.
In this era of digital revolution throughout the nation, EzeePay has emerged as a leading service provider for money transfer through the proven Aadhar Enabled Payment Systems (AEPS) alongside all the other major banking and utility services.The mission is to take banking to every rural household and solve the issue of banking in rural areas across the country.
2. Jai Kisan
Started by Arjun Ahluwalia and Adriel Maniego in 2017, Mumbai-based rural fintech platform Jai Kisan intends to make financial inclusion a reality for rural people and companies. The startup is working with 700+ organised and unorganised entities in the space, with an aggregate client base of over 1.5 lakh provincial people, including farmers.
Jai Kisan is a rural focussed Neo Bank, whose application – Bharat Khata provides a one stop solution for rural businesses’ and individual’s financial needs starting with best suited credit products. The startup offers digital financial services assistance, beginning with credit for online and income-generating, rural commerce transactions. The mission is to change the way financial services are delivered to rural customers.
3. pSwitch:
Fintech startup pSwitch was launched in 2020 in Noida as a push for financial inclusion in India, and enable digital transactions in rural and semi-metropolitan regions where internet availability is a challenge. The startup aims to make the largest network of last-mile retail locations in India to benefit from financial inclusion, social inclusion, Digital India, skill development, employment, government programmes, and more.
pSwitch is an integrated Platform, which can accept payments from all the digital channels available in the country like CC/DC, AePS, UPI, Bharat QR and NFC. It allows the large Industry service providers to serve their end customers most efficiently by enabling entities involved in accepting payments like retail merchants, professionals, educational institutions etc. to accept payments through multiple digital channels.The mission is to build pan-India presence and maximize rural consumer experience through world class ICT enabled infrastructure, led by Financial Inclusion, Digital Inclusion and e-Governance.
Disclaimer: This Article is only a knowledge sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update etc if any.
