Niyogin Fintech Ltd Management Discussions

Global Economy

The global economy in 2025 is marked by a complex interplay of modest growth, persistent uncertainties, and significant divergences between advanced and emerging markets. As per the latest IMF & World Bank publications, the world economy is expanding at a slower pace than in previous decades, with global GDP growth forecasts converging around 2.3% to 2.8% for the year. This represents a notable deceleration from the pre-pandemic period and is well below the historical average of 3.7% observed between 2000 and 2019.

~70% of economies have experienced downward revisions to their growth forecasts since the beginning of the year, underscoring the widespread nature of these challenges.

The subdued growth outlook is attributed to several interrelated factors. Trade tensions remain elevated, with ongoing tariff disputes and protectionist measures dampening cross-border commerce and investment. Policy uncertainty — particularly regarding fiscal and monetary strategies — has further eroded business and consumer confidence, leading to restrained capital expenditures and cautious household spending. Nearly 70% of economies have experienced downward revisions to their growth forecasts since the beginning of the year, underscoring the widespread nature of these challenges.

Advanced economies are projected to grow at a sluggish rate of around 1.4% in 2025. The United States, the largest advanced economy, is expected to post a moderate expansion of 1.8%, supported by resilient consumer demand but constrained by tighter monetary policy and slowing investment. The euro area and Japan are also facing headwinds from weak external demand and demographic pressures, with growth rates hovering near or below 1%. These economies are grappling with aging populations, which are gradually transforming what was once a demographic dividend into a demographic drag, further limiting potential output. Emerging market and developing economies, while still outpacing their advanced counterparts, are also experiencing a slowdown. Growth for this group is projected at 3.7%-4.0%. Regional disparities are evident: East Asia and the Pacific are anticipated to grow by 4.5%, buoyed by relatively strong performances in Southeast Asia. However, China?s growth is expected to decelerate to 4.0% as structural adjustments, property sector weaknesses, and subdued external demand take their toll. South Asia, led by India, remains a bright spot, with India?s economy projected to expand by 6.2%, driven by robust domestic demand and ongoing structural reforms.

Latin America and the Caribbean are forecast to grow by 2.7%, reflecting a modest recovery from pandemic-era disruptions but still hampered by structural constraints and policy uncertainty. The Middle East and North Africa region stands out with a projected growth rate of 5.8%, supported by higher energy prices and ongoing economic diversification efforts in several Gulf countries. In contrast, Europe and Central Asia are expected to see growth of 2.3%, weighed down by geopolitical tensions and the lingering effects of the war in Ukraine.

Inflation remains a central concern for policymakers worldwide

Inflation remains a central concern for policymakers worldwide. While global inflation is expected to moderate in 2025, the decline is proving slower than previously anticipated. Advanced economies are making more rapid progress toward their inflation targets, but many emerging markets continue to face elevated price pressures, particularly for food and energy. Central banks are thus confronted with the delicate task of balancing the need to contain inflation with the imperative to support growth. The risk of renewed inflationary spikes, especially if commodity prices rise or supply chain disruptions re-emerge, could force a more aggressive tightening of monetary policy, potentially undermining the fragile recovery. Structural challenges are also weighing on the global outlook. Investment growth has slowed markedly, and global debt levels have reached new highs, raising concerns about financial stability and the capacity of governments to respond to future shocks. Barriers to capital and labour mobility persist, limiting productivity gains and exacerbating regional disparities. Looking ahead, the medium-term prospects remain clouded by uncertainty. The average global growth rate for the 2020s is on track to be the slowest since the 1960s.

Slow Growth

the global economy in 2025 is characterized by slow growth, persistent inflationary pressures, and significant regional divergences

In summary, the global economy in 2025 is characterized by slow growth, persistent inflationary pressures, and significant regional divergences. Trade tensions, policy uncertainty, demographic shifts, and structural impediments all contribute to a challenging environment.

Indian Economy

India?s economy in 2025 emerges as a standout story of resilience and dynamism amid a challenging global environment. The nation continues to hold its position as the fastest-growing major economy, with real GDP growth for FY2024-25 estimated at 6.4% and projections for FY2025-26 ranging between 6.3% and 6.8%. This sustained momentum places India well ahead of most global peers and close to its own decadal averages, despite the backdrop of international trade disruptions and persistent geopolitical tensions. Growth in India is broad-based, with agriculture, industry, and services all contributing positively. The agricultural sector is expected to rebound with a growth rate of 3.8%, supported by record Kharif production and strong rural demand, while the industrial sector is projected to grow by 6.2%, led by construction, utilities, and a resilient manufacturing base that has withstood weak global demand. The services sector, which continues to be the primary engine of growth, is expanding by 7.2% and now contributes over 55% to total Gross Value Added. Notably, the information technology, finance, and hospitality segments within services have seen robust export growth. Industrial expansion is further supported by strong performances in steel, electronics, and automobile manufacturing, with electronics production growing at a notable pace.

Inflation management has been a significant achievement, with headline retail inflation moderating from 5.4% in FY24 to 4.9% by the end of 2024, due largely to effective government interventions and improved food supply chains. The Reserve Bank of India expects consumer price inflation to align even closer to its 4% target in FY26, providing a stable environment for consumers and investors alike. Fiscal prudence remains at the forefront of government policy, with a strong emphasis on capital expenditure, particularly in infrastructure. The health of the banking sector has improved markedly, as gross non-performing assets dropped to a record low of 2.6%, while the credit-to-GDP gap narrowed significantly and the insurance market expanded healthily year-over-year.

India?s external sector has demonstrated remarkable resilience despite global headwinds. Overall exports, including both merchandise and services are growing, foreign direct investment (FDI) inflows are surging, and remittances from the Indian diaspora played a crucial role in keeping the current account deficit contained. The country?s external debt-to-GDP ratio stood at 19.1% as of December 2024, which is among the lowest for emerging markets and underscores the strength of India?s macroeconomic fundamentals.

The digital economy is growing rapidly, with projections suggesting it will surpass $1 trillion by 2025, further integrating India into the global digital landscape.

Several key drivers underpin this positive trajectory. Domestic consumption, buoyed by a rebound in rural demand and steady urban spending, remains robust. Sustained public investment in infrastructure and manufacturing, coupled with improved financial sector health and expanding credit availability, has provided further impetus. The digital economy is growing rapidly, with projections suggesting it will surpass $1 trillion by 2025, further integrating India into the global digital landscape. However, challenges remain. Global uncertainties, including trade disruptions, geopolitical tensions, and volatile commodity prices, continue to pose risks. Inflationary pressures, particularly from food price volatility and supply chain bottlenecks, require ongoing vigilance. Structural issues such as the need for further reforms in taxation, labour laws, and governance must be addressed to sustain high growth rates.

Looking ahead, the outlook for 2025-26 remains positive, with the Reserve Bank of India projecting real GDP growth at 6.5%. The government?s continued focus on fiscal consolidation, capital expenditure, and structural reforms is expected to maintain growth momentum. Managing inflation, enhancing productivity, and fostering innovation will be critical to achieving the long-term vision of a developed India by 2047. Ultimately, India?s economic trajectory in 2025 is defined by its capacity to navigate global headwinds, leverage domestic strengths, and pursue policy reforms that foster inclusive and sustainable growth, ensuring its place as a leading force in the world economy.

Economic Survey of India 2024-25, RBI

Monetary Policy 2025

The Reserve Bank of India?s Monetary Policy for 2025 reflects a strategic response to a complex global and domestic economic landscape. The recent Monetary Policy Committee (MPC) meetings held 2025, saw a notable shift in the policy stance and significant adjustments to key policy rates, underscoring the RBI?s dual mandate of maintaining price stability and supporting economic growth.

In the most recent meeting held in June, the MPC decided to reduce the policy repo rate by 50 basis points, bringing it down to 5.50%. Correspondingly, the Standing Deposit Facility (SDF) rate was set at 5.25%, and the Marginal Standing Facility (MSF) rate and the Bank Rate were adjusted to 5.75%. This move marks a transition from an ‘accommodative? to a ‘neutral? policy stance, signaling a more balanced and cautious approach to future monetary policy decisions in light of evolving economic conditions. It is important to note that the 50 basis point reduction in June follows the first reduction of the year, a 25 basis point cut in February 2025, followed by an additional rate cut of 25 basis points in April. Thus, so far, the MPC has reduced the policy repo rate by 100 basis points in 2025.

3.7%

The RBI projects Consumer Price Index inflation for 2025- 26 at 3.7%, with quarterly estimates ranging from 2.9% to 4.4%, assuming a normal monsoon and stable commodity prices.

Headline inflation has shown a significant moderation, with the Consumer Price Index (CPI) inflation dropping to 3.2% in April 2025 — the lowest level in nearly six years. This decline is primarily attributed to a sustained drop in food inflation, which reached a 42-month low, alongside steady core inflation. The RBI projects CPI inflation for 2025-26 at 3.7%, with quarterly estimates ranging from 2.9% to 4.4%, assuming a normal monsoon and stable commodity prices.

This economic outlook is supported by resilient domestic demand, healthy agricultural output, reviving industrial activity, and sustained momentum in the services sector. Private consumption and investment are both showing signs of revival, while robust exports and buoyant imports reflect strong domestic conditions.

The RBI remains committed to ensuring sufficient liquidity in the banking system. A 100 basis point reduction in the Cash Reserve Ratio (CRR) is set to be implemented in tranches, aimed at releasing durable liquidity and lowering funding costs for banks. This is expected to reinforce the transmission of policy rate cuts to the broader credit market, supporting economic activity. The financial sector continues to exhibit strength, with improved asset quality, robust capital buffers, and stable profitability across both banks and non-bank financial companies. The RBI?s vigilant approach to liquidity management and financial stability is designed to cushion the economy against potential global spill overs and volatility.

The RBI?s monetary policy in 2025 is characterized by a careful balancing act — stimulating growth through lower interest rates while maintaining vigilance on inflation and financial stability. The neutral policy stance allows flexibility to respond to rapidly changing global and domestic conditions, ensuring that monetary policy remains supportive yet prudent as India navigates the evolving economic landscape.

Reserve Bank of India

Indian MSME Sector

India?s Micro, Small, and Medium Enterprise (MSME) sector continues to demonstrate remarkable resilience and growth potential, serving as one of the core engines of the Indian economy.

Sector Performance and Growth Trajectory

The MSME sector in FY25 exhibited a mixed but fundamentally robust performance profile. The total commercial credit portfolio outstanding reached

Rs.35.2 lakh crore as of March 2025, representing a healthy 13% year-over-year growth. This substantial portfolio expansion underscores the sector?s continued importance in India?s economic framework and reflects sustained confidence from both lenders and borrowers in the MSME ecosystem.

Rs. 35.2 lakh crore

The total commercial credit portfolio outstanding reached

Rs.35.2 lakh crore as of March 2025, representing a healthy 13% year-over-year growth.

However, the growth trajectory revealed some nuanced patterns. While the overall year witnessed a 3% year-over-year growth in commercial credit supply by value, the final quarter (January-March 2025) experienced an 11% year-over-year decline, suggesting that lenders adopted a more cautious approach possibly due to increased external headwinds and evolving risk assessment strategies. This moderation in fresh credit origination was particularly pronounced among private banks, which witnessed the sharpest decline of 14% year-over-year growth, primarily in the medium to large-ticket loan segments.

Despite the supply-side moderation, credit demand remained robust with an 11% year-over-year growth in commercial loan enquiries during the January-March 2025 quarter. This divergence between demand and supply indicates underlying business optimism and expansion aspirations among MSMEs, even as lenders have become more selective in their credit allocation strategies.

Asset Quality and Portfolio Health

One of the most encouraging developments in FY25 was the significant improvement in asset quality across the MSME lending portfolio. Balance-level delinquencies dropped to 1.79% as of March 2025, representing the lowest level in five years and marking a substantial 35 basis points improvement compared to the previous year. This improvement in credit performance demonstrates enhanced risk assessment capabilities, better underwriting standards, and improved monitoring mechanisms across the lending ecosystem.

1.79%

Balance-level delinquencies dropped to 1.79% as of March 2025, representing the lowest level in five years and marking a substantial 35 basis points improvement compared to the previous year.

The performance improvement was particularly notable across different lender categories, with private banks maintaining the best portfolio quality at 1.2% delinquency rates, while public sector banks reported 2.1% delinquency rates. This differential highlights the varying risk management approaches and borrower profiles across different lending institutions, with private banks generally focusing on higher-quality borrowers and more sophisticated risk assessment methodologies. However, the vintage delinquency analysis revealed some areas requiring attention.

Early delinquencies in the lower ticket size segment (less than

Rs.10 lakhs) showed signs of stress, highlighting the need for closer monitoring by lenders, particularly for micro-enterprises that may have limited financial buffers and face disproportionate challenges during business cycle fluctuations.

New-to-Credit Borrowers and Financial Inclusion

The MSME sector?s role in driving financial inclusion remained significant in FY25, with New-to-Credit (NTC) borrowers accounting for 47% of all new loan originations in the January-March 2025 quarter. While this represents a slight decline from the 51% share in the corresponding period of the previous year, it still demonstrates the sector?s crucial role in bringing new enterprises into the formal financial system.

The NTC segment?s importance becomes even more apparent when considering that only 3.68 crore out of 6.35 crore registered Udyam MSMEs have accessed formal credit, indicating a substantial opportunity gap of 2.67 crore MSMEs that remain outside the formal credit ecosystem. This represents a significant opportunity for lenders to expand their reach while supporting the government?s financial inclusion objectives.

Public Sector Banks emerged as leaders in NTC originations, capturing 60% of such originations, reflecting their continued commitment to government initiatives and financial inclusion mandates.

The trade sector contributed the highest proportion of NTC borrowers at 53%, while the manufacturing sector witnessed the most significant growth in NTC originations with a 70% year-over-year increase.

Sectoral Distribution and Economic Impact

The sectoral composition of MSME credit in FY25 revealed interesting dynamics in India?s economic transformation. Manufacturing continued to dominate with 34% of origination value, despite representing only 23% of loan count, indicating larger average ticket sizes in this sector. However, the manufacturing sector?s share has been gradually declining over the past two years, reflecting a diversification trend in the MSMEecosystem.

The trade sector maintained consistent market share while showing growth in the Rs.1 crore to Rs.10 crore exposure segment, attributed to priority sector lending requirements and increased formalization through Udyam registration. Professional and Other Services sectors have been steadily growing their share, now contributing 36% of all loans disbursed by value, representing a 5% point increase over the past four years. This shift suggests India?s evolving economic structure and the growing importance of service-oriented MSMEs.

Geographical Concentration and Regional Dynamics

The geographical distribution of MSME credit in FY25 continued to show significant concentration, with the top five states — Maharashtra, Gujarat, Tamil Nadu, Uttar Pradesh, and Delhi — contributing 48% of overall origination value. This concentration reflects the industrial and commercial development patterns across India, with these states serving as major economic hubs.

48%

Maharashtra maintained its leadership position with strong manufacturing sector focus and private bank dominance (40% share), while Gujarat demonstrated the highest manufacturing concentration at 53% of originations. Tamil Nadu, particularly the Tirupur cluster, showed significant private bank presence (44%) with manufacturing sector emphasis. Uttar Pradesh presented a unique profile with trade sector dominance and a more diverse lender mix, while Delhi maintained manufacturing sector focus with strong private bank participation. The state-wise analysis reveals interesting patterns in lender preferences and sectoral focus. Uttar Pradesh, with over 68 lakh registered Udyam MSMEs, represents significant untapped potential for further credit expansion, particularly given its primary focus on cash credit, overdraft, and demand loanproducts.

The geographical distribution of MSME credit in FY25 continued to show significant concentration, with the top five states — Maharashtra, Gujarat, Tamil Nadu, Uttar Pradesh, and Delhi — contributing 48% of overall origination value.

Lender Ecosystem and Credit Distribution

The FY25 lending landscape demonstrated a well-distributed approach across different lender categories. Private banks captured 42% of credit demand and 35% by volume, focusing primarily on large ticket loans and higher-quality borrowers. Public Sector Banks maintained similar volume share (35%) but represented 39% of credit demand, indicating their continued commitment to smaller ticket loans and priority sector lending.

NBFCs contributed 18% by volume, playing a crucial role in serving borrowers who might not meet traditional banking criteria. The "Others" category, including cooperative banks and small finance banks, represented 12% of the market, demonstrating the ecosystem?s diversity and the importance of specialized lendinginstitutions.

The credit exposure analysis revealed that borrowers with exposure up to Rs.1 crore comprised 65% by volume but only 23% by value, highlighting the predominance of micro-enterprises in the MSME ecosystem. Conversely, borrowers with Rs.10 crore to Rs.50 crore exposure represented only 8% by volume but 34% by value, indicating the significant economic impact of larger MSMEs.

Government Initiatives and Policy Support

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) achieved remarkable milestones in FY25, demonstrating the government?s commitment to MSME sector development. CGTMSE covered over 27 lakh beneficiaries with a guarantee amount of Rs.3.06 lakh crore, representing a 51% year-over-year growth and the highest guarantee amount in the institution?s history. Several policy initiatives implemented during FY25 enhanced the sector?s credit accessibility. The guarantee ceiling was raised from Rs.5 crore to Rs.10 crore effective April 2025, while guarantee fees were reduced for loans above Rs.1 crore up to Rs.5 crore. Coverage for women-led enterprises was enhanced from 85% to 90%, and eligible activities were expanded to include wholesale trade and educational institutions.

Rs. 9.34 lakh crore cumulative approved guarantees since CGTMSE?s inception

The cumulative approved guarantees since CGTMSE?s inception reached Rs.9.34 lakh crore, demonstrating the scheme?s substantial contribution to MSME sector development. The automation of guarantee processes through API integration and improved claim settlement ratios have enhanced operational efficiency and lender confidence.

Technology and Innovation in Credit Assessment

A significant finding from the FY25 analysis was the importance of comprehensive borrower assessment. The report revealed that lenders who leveraged information across both individual and business profiles of borrowers experienced 40% improvement in borrower performance. This highlights the growing sophisticationin credit assessment methodologies and the importance of holistic risk evaluation.

The analysis of borrowers with dual footprints (individual and entity) showed that 71% had credit history for more than 12 months as entities, while 23% were high-risk borrowers (CMR 7-10). This comprehensive approach to credit assessment represents a significant advancement in risk management and suggests the potential for more nuanced and effective lending strategies.

Challenges and Future Outlook

Despite the overall positive performance, the MSME sector faces several challenges that require attention. The moderation in credit supply during the latter part of FY25 suggests that external headwinds and global uncertainties are impacting lender confidence. The early delinquency trends in smaller ticket loans indicate the need for enhanced monitoring and support mechanisms for micro-enterprises.

The significant gap between registered MSMEs and those accessing formal credit remains a key challenge and opportunity. With only 58% of registered MSMEs having accessed formal credit, there is substantial potential for sector expansion and financial inclusion enhancement.

Conclusion and Strategic Implications

The MSME sector?s performance in FY25 demonstrates remarkable resilience and continued growth potential despite facing external challenges. The improvement in asset quality, sustained demand growth, and significant government support through CGTMSE initiatives position the sector well for continued expansion. However, the moderation in credit supply and the need for enhanced risk management in smaller ticket segments require careful attention from both lenders and policymakers.

The sector?s contribution to India?s economic transformation remains crucial, with its role in employment generation, innovation, and export competitiveness becoming increasingly important. The technology-driven improvements in credit assessment and the growing sophistication of the lending ecosystem suggest that the MSME sector is well-positioned to support India?s journey toward becoming a developed economy by 2047. The path forward requires continued focus on financial inclusion, technology adoption, risk management enhancement, and policy support to ensure that the MSME sector can fulfil its potential as a key driver of India?s economic growth and development.

The technology-driven improvements in credit assessment and the growing sophistication of the lending ecosystem suggest that the MSME sector is well-positioned to support India?s journey toward becoming a developed economy by 2047.

TransUnion CIBIL: MSME Pulse May2025

Union Budget 2025-26: Strengthening the MSME Sector

The Union Budget 2025-26 presents a comprehensive strategy to strengthen India?s MSME sector, recognizing its pivotal role as one of the key engines in India?s developmental journey alongside agriculture, investment, and exports. The budget introduces several transformative measures designed to enhance credit access, support entrepreneurial ventures, and promote labour-intensive industries while addressing structural challenges faced by thesector.

The most significant reform involves revised classification criteria, with investment and turnover limits for MSME classification increased by 2.5 times and 2 times respectively. This expansion is expected to help businesses scale operations more effectively while accessing better resources, ultimately improving efficiency, technological adoption, and employment generation.

MSME classification

With investment and turnover limits for MSME classification increased by 2.5 times and 2 times Enhanced credit availability remains a cornerstone of the budget?s MSME focus. The government has announced increased credit guarantee cover for micro and small enterprises, startups, and export-focused MSMEs. A particularly notable innovation is the introduction of credit cards for micro enterprises, providing these smallest businesses with flexible financing options to meet their operational needs.

Support for first-time entrepreneurs features prominently through a new scheme providing financial assistance to first-time entrepreneurs from disadvantaged backgrounds. This initiative aims to democratize entrepreneurship and ensure inclusive economic participation across different socialstrata.

The budget demonstrates a strategic focus on labour-intensive sectors including footwear, leather, and toy manufacturing. These sector-specific initiatives are designed to enhance productivity while positioning India as a competitive player in global markets. Additionally, the establishment of new institutions and missions for manufacturing and clean technology reflects the government?s commitment to modernizing the MSME ecosystem.

Rs.23,168.15 crore The budgetary allocation for the Ministry of MSME in 2025-26

The budgetary allocation for the Ministry of MSME has been increased to Rs.23,168.15 crore for 2025-26, representing a significant increase from the previous year?s

Rs.17,306.70 crore and demonstrating the government?s financial commitment to the sector.

The MSME sector?s growing importance is evidenced by its contribution to India?s Gross Value Added, which increased from 27.3% in 2020-21 to 30.1% in 2022-23. With 5.93 crore registered MSMEs employing more than 25 crore people, the sector accounts for 45.73% of India?s total exports in 2023-24, reinforcing its role in positioning the country as a global manufacturing hub.

The budget?s comprehensive approach combines immediate financial support with long-term structural reforms, creating an ecosystem that enables MSMEs to expand their reach and strengthen their contribution to India?s economic growth. These measures, alongside existing initiatives like Udyam Registration and PM Vishwakarma, reflect a holistic strategy to amplify the role of MSMEs in driving economic growth, employment, and inclusive development across India.

Ministry of Micro, Small & Medium Enterprises

Global Fintech Industry

Overview

The global fintech industry is experiencing a transformative phase, characterized by robust revenue growth, the emergence of dominant scaled players, and the rapid adoption of cutting-edge technologies such as artificial intelligence and blockchain. In 2024, fintech revenues surged by 21%, significantly outpacing the 6% growth of traditional financial services, underscoring the sector?s resilience amid macroeconomic uncertainty. The industry?s early years were marked by a phase of "growth at all costs" mindset, but today?s leaders are focused on sustainable, profitable expansion, navigating increased regulatory scrutiny and fierce competition from both established incumbents and nimble disruptors. Despite fintech?s capturing only about 3% of the global banking and insurance revenue pools, they have proven adept at addressing longstanding inefficiencies, particularly in payments, challenger banking, and digital asset management, while vast opportunities remain across geographies and verticals.

Key Industry Trends

AI Revolution: From Automation to Agentic AI

The integration of artificial intelligence, particularly the emergence of agentic AI, represents one of the most significant technological shifts poised to reshape the fintech landscape. Unlike current generative AI applications that require continuous human prompting, agentic AI operates autonomously, executing tasks, learning from outcomes, and adapting strategies independently. This technological evolution promises to transform financial services from simple automation to true autonomy, enabling AI agents to monitor customer behaviour, execute transactions, and optimize financial strategies without human intervention.

The practical applications of agentic AI span multiple financial services domains. In retail banking, proactive financial agents will monitor customer income, behaviour, and goals to automatically move funds and adjust savings strategies. Wealth management will benefit from goal-driven portfolio agents that monitor markets, rebalance portfolios, and execute trades aligned with changing client objectives. Payment systems will utilize self-executing agents to manage recurring billing, issue virtual cards, and optimize transaction routing for cost efficiency.

Wealth management will benefit from goal-driven portfolio agents that monitor markets, rebalance portfolios, and execute trades aligned with changing client objectives

Example Agentic
AI Use Cases in Financial Services
WEALTH MANAGEMENT	RETAIL BANKING
Goal-driven portfolio agents monitor the market, rebalance portfolios and execute trades and align allocations with changing client objectives	Proactive financial agents monitor a customers? income, behavior, and goals, then take actions like auto-moving funds and adjusting savings goals
FINANCIAL INFRASTRUCTURE	PAYMENTS
Risk management agents monitor liquidity, detect anomalies, reallocate capital, and adjust margin or collateral positions in real time	Self-executing payment agents manage recurring billing, issue virtual cards, initiate payments and automatically route transactions for cost optimization
	LENDING
	Full-stack lending agents assess creditworthiness, preapprove loans, generate offers, collect documents, and proactively adjust repayments terms if risk changes

Onchain Finance: The Quest for Mainstream Adoption

Despite years of technological development, onchain finance remains in search of the key use case that will trigger widespread adoption. The sector has shown promising developments with major acquisitions, signalling institutional confidence in blockchain-based financial infrastructure. Regulatory clarity is improving globally, with the European Union?s Markets in Crypto-Assets (MiCA) regulation providing a comprehensive framework for digital assets.

Stablecoins represent the most mature application of onchain finance, with their primary use cases evolving beyond crypto trading to include store of value functions in high-inflation markets and cross-border payment solutions. In markets with currency instability, stablecoins provide unrestricted access to US dollar liquidity.

Asset tokenization emerges as potentially more transformative than stablecoins, with the capability to address fundamental inefficiencies in traditional financial infrastructure. The tokenization of financial assets including bonds, private credit, and real estate could eliminate approximately $20 billion in annual intermediary costs while enabling instant, 24/7 settlement and democratizing access to previously exclusive investment opportunities.

Challenger Banking Evolution: Scaling Beyond Disruption

Challenger banks have evolved from emerging disruptors to established players within the global banking ecosystem, particularly in markets like Brazil, the UK, South Korea, and China, where they account for more than 10% of total bank market capitalization. However, success remains concentrated among a small group of leaders, with only 24 out of 650 global challenger banks generating revenues above $500 million annually.

$500 million

Revenue generated annually by 24 out of 650 global challenger banks

The strategic focus for challenger banks is shifting toward four key areas: diversifying revenue streams beyond fee income, increasing average deposit balances, targeting more affluent customer segments, and selective geographic expansion.

Geographic expansion presents both opportunities and challenges for challenger banks. While some advantages exist, including leaner operating models and digital-first customer engagement, historical expansion attempts have faced significant obstacles. Notable failures include N26 and Monzo?s exits from the US market and Revolut?s withdrawal from Canada, highlighting the complexity of navigating diverse regulatory frameworks and intense local competition.

Fintech Lending: Private Credit Partnerships Drive Growth

The fintech lending sector is experiencing renewed momentum driven by partnerships with private credit funds, declining interest rates, and maturing customer data capabilities. Despite representing only 3% penetration of the $2 trillion global lending market, fintech lenders are positioned to benefit from several favourable trends. Private credit funds, with $1.7 trillion in assets under management growing at 20% annually, are increasingly partnering with fintechs to access loan origination capabilities.

These partnerships enable fintechs to leverage their customer acquisition strengths while accessing stable funding sources that are often more predictable than traditional deposit funding. The private credit opportunity in fintech lending represents approximately $280 billion in white-space potential. Current fintech-originated loan balances of $500 billion split between $370 billion in consumer loans and $130 billion in business loans, with $320 billion addressable by private credit funds after filtering for return expectations and regional accessibility. Excluding existing announced deals of $40 billion in annual origination volume, the remaining opportunity represents significant growth potential for both fintechs and private credit providers.

$280 billion

The private credit opportunity in fintech lending represents approximately $280 billion in white-space potential.

Emerging Growth Sectors: B2B, Infrastructure and Lending

The next generation of scaled fintech winners is emerging from 3 primary verticals: B2B payments and services, financial infrastructure, and lending solutions. B2B-focused fintechs account for 39% of revenues among companies generating $50-500 million annually, reflecting the significant pain points that remain in business financial workflows. These companies are automating manual, costly, and slow processes that have historically plagued business financial operations.

Financial infrastructure represents 18% of revenues in the scaling fintech segment, addressing the substantial work remaining to upgrade legacy financial systems. There is also a growing partnership model between fintechs and incumbents, where fintechs serve as technology providers rather than direct competitors.

The embedded finance opportunity within B2B verticals continues to expand, with vertical SaaS platforms increasingly integrating payment processing, lending facilities, and other financial services into their core offerings. This integration creates multiple revenue streams while improving customer retention and expanding addressable markets for software providers serving specific industry verticals.

Growth Drivers

Market Penetration

• Opportunities Across Verticals

The most significant growth driver for the fintech industry lies in the substantial market penetration opportunities across various financial services verticals. With only 3% of global banking and insurance revenue pools currently penetrated by fintechs, the industry represents various untapped opportunities. Payments lead with 14% penetration, while trading and investment achieve 5%, lending reaches 3%, deposits attain 2%, and insurance remains below 1%.

The concentration of fintech success in 5 primary areas — digital wallets, acquiring and vertical SaaS, challenger banking, retail crypto trading, and buy-now-pay-later services — accounts for ~55% of scaled fintech revenues through payments alone. However, significant opportunities exist in underserved segments including wealth management, insurance, and various lending categories beyond unsecured personal loans.

Technology-Driven Innovation •and Efficiency

Advanced technologies, particularly artificial intelligence and blockchain infrastructure, serve as fundamental growth drivers enabling fintechs to address previously unsolvable problems and create new market categories. The rapid advancement of AI capabilities, from basic automation to sophisticated agentic systems, provides fintechs with tools to deliver hyper-personalized services, automate complex workflows, and operate at unprecedented scales with minimal human intervention.

The development of blockchain and onchain finance infrastructure creates opportunities for fintechs to build more efficient, transparent, and accessible financial systems. Asset tokenization alone could unlock trillions of dollars in currently illiquid assets, making them accessible to broader investor bases while reducing intermediary costs and settlement times.

Capital Market Dynamics and Investment Flows

The fintech industry benefits from substantial capital availability, with $677 billion in venture capital dry powder globally, of which 13% has historically been allocated to fintech investments. The shift toward sustainable growth metrics has created a more stable foundation for long-term value creation. Revenue multiples for public fintechs stabilized in 2024 with a 3% increase after a 31% decline in 2023, while equity funding declines moderated to 13% compared to 51% in the previous year. This stabilization, combined with robust 21% revenue growth, demonstrates the industry?s ability to maintain expansion while improving financial discipline.

Private credit partnerships represent a new and significant source of capital for fintech growth, particularly in lending sectors. The $280 billion white-space opportunity for private credit funds in fintech lending creates aligned incentives between capital providers seeking yield and fintechs requiring stable funding sources.

Regulatory Evolution and Market Maturation

Regulatory clarity and framework development serve as crucial growth enablers, with several jurisdictions implementing comprehensive digital asset regulations and open banking standards. The European Union?s MiCA regulation, Switzerland?s DLT Act, and various open banking implementations across 65+ countries provide legal certainty that enables fintech innovation and scaling. The United States? renewed focus on crypto-friendly policies and potential for increased federal banking charter availability could significantly accelerate domestic fintech growth.

The maturation of regulatory frameworks reduces compliance costs and operational risks for fintechs while creating competitive advantages over less regulated alternatives. However, this evolution also increases expectations for regulatory compliance and risk management capabilities, particularly for scaled fintechs that can no longer operate under the "move fast and break things" philosophy.

Demographic and Behavioural Shifts

Changing consumer expectations and demographic trends provide fundamental growth drivers for fintech adoption. Younger consumers increasingly expect seamless, digital-first financial experiences while demonstrating greater willingness to trust non- traditional financial service providers. This trend is particularly pronounced in emerging markets where traditional banking infrastructure is less developed and mobile-first solutions can achieve higher penetration rates.

Business digitization trends, accelerated by recent global events, have created increased demand for B2B fintech solutions. Companies of all sizes are seeking to automate financial workflows, improve cash flow management, and access alternative funding sources. This trend benefits vertical SaaS providers, B2B payment processors, and embedded finance platforms that can integrate financial services into existing business software ecosystems.

The convergence of these growth drivers — substantial market penetration opportunities, technology-driven innovation, favourable capital market conditions, regulatory evolution, and demographic shifts — positions the global fintech industry for continued expansion and transformation.

Indian Fintech Industry

The Indian fintech ecosystem stands at a critical juncture in 2025, having experienced remarkable growth over the past decade while simultaneously facing significant regulatory challenges and profitability concerns. The sector has grown significantly in the past decade, establishing India as a global fintech powerhouse.

Major Fintech Trends

Embedded Finance Revolution

Embedded finance has emerged as one of the most transformative trends in Indian fintech, seamlessly integrating financial services into non-financial platforms. This trend manifests through e-commerce sites offering instant credit at checkout and ride-hailing apps providing insurance during booking. The growth of super apps exemplifies this integration, offering services ranging from bill payments and online shopping to loans and investments within a single platform.

This integration significantly enhances customer experience by eliminating the need to switch between multiple platforms while promoting financial inclusion by extending essential services to underserved populations. The convenience factor is reshaping how Indians interact with financial services, making them more accessible to rural and underserved areas.

AI and ML Adoption

AI and ML technologies are making fintech services more intelligent and efficient, with applications spanning fraud detection, identity verification, and personalized financial advice. These technologies analyse transaction patterns in real-time to flag unusual activities, preventing financial fraud before it occurs. AI-powered tools facilitate quicker identity verification processes, accelerating customer onboarding. The advancement extends to automated credit scoring systems that evaluate creditworthiness based on diverse data points, expanding access to credit for previously underserved populations. AI-driven chatbots provide instant customer support, while robo-advisors are gaining traction in wealth management, using algorithms to guide investment decisions and make financial planning more accessible and affordable.

Blockchain and Decentralized Finance (DeFi) Growth

Blockchain technology is revolutionizing the fintech landscape beyond cryptocurrencies, with applications in smart contracts, identity verification, and secure payments. Smart contracts automate agreements and eliminate intermediaries, while blockchain enhances identity verification by securely storing user data, making identity checks faster and tamper-proof.

Decentralized Finance (DeFi) enables peer-to-peer lending, borrowing, and trading without traditional banking intermediaries. In India, DeFi holds significant potential for empowering individuals by providing easier access to loans and financial services.

Buy Now, Pay Later (BNPL) and Alternative Lending

The BNPL model is reshaping payment preferences, allowing consumers to split payments into smaller installments rather than paying the full amount upfront. Many Indian platforms are leading this trend, offering easy access to credit even for those without traditional credit scores. This is particularly beneficial for younger audiences and first-time borrowers, making high-value purchases more affordable.

Alternative lending models are expanding credit access in underserved areas, improving the overall accessibility of financial services. These models are crucial for financial inclusion, bridging the gap between traditional banking and the needs of underbanked populations.

Regulatory Environment and Compliance Challenges

The regulatory landscape has been particularly challenging for Indian fintech companies, with the RBI taking active measures to curtail rapid expansion in 2024. Key regulatory actions included tightening norms for P2P lending, establishing independent self-regulation organizations, and startup-specific interventions. These measures caused significant distress within the fintech ecosystem, with compliance costs reaching $20 million for early-stage startups.

The implementation of Regtech (Regulatory Technology) is becoming essential for managing complex regulatory requirements. Regtech uses advanced technology to automate processes like reporting, audits, and risk assessments, reducing manual effort and minimizing errors. This enables faster compliance and helps fintech companies meet regulatory deadlines while focusing on growth.

Challenges and Future Prospects

The Indian fintech industry faces several persistent challenges alongside emerging opportunities. The digital divide remains a significant barrier, with rural areas having limited internet access and lower digital literacy rates. Infrastructure challenges require continued investment in digital education and connectivity improvements.

Data security and privacy concerns are intensifying as cyber-attacks increase and users become more privacy-conscious. Fintech companies must invest in robust cybersecurity systems and comply with privacy regulations to maintain consumer trust.

Despite these challenges, the industry?s future appears bright with government initiatives like Digital India and Startup India fostering innovation. The Unified Payments Interface (UPI) success story demonstrates the potential for future reforms to enhance fintech adoption nationwide. The sector?s focus on financial inclusion will continue bridging the gap between urban and rural India, with mobile wallets and digital savings empowering millions of unbanked individuals. This integration into the formal economy will improve quality of life while creating new market opportunities for fintech companies.

As the industry evolves, companies must leverage cutting-edge technologies while maintaining regulatory compliance and focusing on sustainable, profitable growth. The convergence of AI, blockchain, embedded finance, and sustainable practices positions Indian fintech for continued innovation and expansion in the global market.

Indian Digital PaymentsLandscape

India?s digital payments landscape has emerged as a global phenomenon, transforming the country from a predominantly cash-based economy to one of the world?s most advanced digital payment ecosystems. India now accounts for nearly 46% of the world?s digital transactions, representing a staggering 90-fold increase in retail digital payments over the past 12 years. This remarkable transformation positions India as a global leader in payment innovations and digital financial inclusion.

The Indian digital payments market has demonstrated exceptional resilience and growth, with transaction volumes increasing by 42% YOY in FY24. The market is projected to expand dramatically from 159 billion transactions in FY24 to 481 billion transactions by FY29, representing a three-fold increase. In terms of transaction value, the market is expected to grow from INR 262 trillion to INR 577 trillion over the same period, marking a significant doubling of the market size.

The sustained growth is attributed to multiple factors including rapid expansion of digital infrastructure, changing consumer preferences toward digital payments, an expanding merchant acceptance network, and continuous innovation by ecosystem participants.

UPI: The Digital Payments Revolution

UPI stands as the cornerstone of India?s digital payments success story, continuing its remarkable growth trajectory with a 57% YOY increase in transaction volume and 44% growth in transaction value during FY24. With 131.12 billion transactions worth INR 199.9 trillion processed in FY24, UPI has solidified its position as the dominant payment rail in India?s retail digital payments landscape.

The platform now accounts for over 80% of the total retail digital payment transaction volume, and this dominance is expected to increase to 91% by FY 2028-29. Person-to-merchant (P2M) transactions constitute 60% of UPI usage, while person-to-person (P2P) transactions account for 40%, indicating a significant shift toward commercial transactions.

UPI Innovation and Future Prospects

UPI is projected to reach a historic milestone of 1 billion daily transactions by FY28, with the daily transaction volume expected to increase to 1.4 billion by FY29. The integration of credit cards with UPI has emerged as a game-changing innovation, with users spending over INR 22,000 per month through credit cards linked to UPI, conducting an average of 21 transactions monthly — four times more frequent than traditional physical credit cards. The Reserve Bank of India (RBI) is exploring biometric authentication alternatives to traditional PINs, considering fingerprint recognition on Android devices and Face ID on iOS platforms to enhance transaction security and reduce fraud. This transition will initially offer both PIN and biometric authentication methods simultaneously to ensure a smooth user experience.

Merchant Acquiring Infrastructure

The merchant acquiring landscape has experienced exponential growth, with offline merchant acquiring showing remarkable expansion. QR code deployments reached 352 million, marking a 34% increase in FY24, while POS deployments grew to 8.9 million with a 14% increase.

QR Code Revolution

QR codes have emerged as the preferred payment acceptance method for merchants due to their convenience, ease of setup, and zero MDR charges on UPI transactions. The deployment has seen a remarkable 50%+ CAGR over the past three years, driven by new players entering the market, significant penetration in tier II and III cities, and cross-selling opportunities for financial services.

Soundbox Innovation

Soundboxes are gaining rapid traction alongside QR codes, providing voice confirmations for transactions that significantly streamline the payment process and enhance merchant experience. These devices help reduce errors and fraud while creating merchant loyalty through improved ringfencing strategies.

NETC and FASTag

The National Electronic Toll Collection (NETC) system has achieved notable success with 97% penetration in mobility payments, covering 1,228+ toll plazas across India. FASTag has dramatically reduced wait times at toll plazas from 714 seconds to 47 seconds, improving travel experience and fuel efficiency.

NETC processed 3.84 billion transactions worth INR 648 billion in FY24, showing 13% and 20% growth in volume and value respectively. The government is implementing Global Navigation Satellite System (GNSS) technology to eliminate wait times entirely, positioning India alongside developed economies like Switzerland and Germany.

Bharat Bill Payment System (BBPS)

BBPS demonstrated substantial growth in FY24 with 26% increase in transaction volume and 60% surge in transaction value, processing 1.387 billion transactions worth INR 4.307 trillion. The system has onboarded more than 21,000 billers, with electricity payments (38%) and loan repayments (34%) being the largest contributors. The RBI has introduced several measures to enhance BBPS penetration, including reducing net worth requirements from INR 100 crore to INR 25 crore, enabling cross-border payments, and expanding scope to include all categories of payments and collections.

26% increase BBPS demonstrated substantial growth in FY24 with 26% increase in transaction volume and 60% surge in transaction value

Future Trends and Innovations

Big Data Analytics and AIIntegration

The intersection of big data analytics and payment solutions is transforming the industry through fraud detection, personalized financial solutions, real-time transaction monitoring, and enhanced customer insights. Payment companies are leveraging machine learning algorithms and natural language processing to automate processes and improve customer service.

Business Payments Digitization

The B2B payments landscape is undergoing significant transformation with the emergence of connected finance solutions, commercial credit cards, and virtual card adoption. These innovations provide businesses with end-to-end payment solutions, improved cash flow management, and simplified reconciliation processes.

Cross-Border Payment Expansion

India leads global remittance inflows with USD 125 billion received in 2023, representing 12.3% growth and 66% share in South Asia. The government has proposed reducing cross-border payment costs from 6.18% to 3% through technology integration, as presented to the World Trade Organization.

Global Expansion and International Recognition

UPI?s global expansion continues with strategic partnerships enabling integration in numerous countries through NPCI International Payments. The UPI One World initiative, launched for G20 countries, allows foreign visitors to experience seamless P2M payments, supporting India?s tourism sector that is expected to contribute USD 250 billion to GDP by 2030.

Challenges and Opportunities

Despite remarkable growth, the industry faces challenges including low QR activation rates, merchant switching between payment providers, fraud prevention, and the need for alternative credit underwriting mechanisms for new-to-credit customers. However, these challenges present opportunities for innovation in areas such as biometric authentication, connected finance solutions, and enhanced loyalty programs.

India?s digital payments ecosystem represents a transformative success story that has fundamentally altered the country?s financial landscape. With projections indicating continued exponential growth, innovative product developments, and expanding global adoption, India is well-positioned to maintain its leadership in digital payments innovation. The ecosystem?s success demonstrates the power of collaborative efforts between regulators, banks, FinTech companies, and other stakeholders in creating a more inclusive, efficient, and secure financial system.

The journey from a cash-dominated economy to becoming the global leader in digital transactions within just over a decade showcases India?s technological prowess and adaptive regulatory framework. As the industry moves toward achieving 1 billion daily UPI transactions and doubling credit card penetration, India?s digital payments story continues to evolve as a model for developing economies worldwide.

PWC?s The Indian Payments Handbook

About Niyogin Fintech Limited

Overview

Niyogin Fintech Limited is an innovative fintech and lending Company based in India, holding the distinction of being an early-stage, publicly listed entity. Over the years, the Company has evolved into a dual-business model focused on serving underservedsegments including rural India and MSMEs through innovative partnerships and cutting-edge technology. Following the Board?s recent approval of a landmark composite scheme of arrangement for demerger in FY25, Niyogin is structured to create two distinct, focused, and pure-play entities that will pursue independent growth strategies while maintaining their core mission of financial inclusion. The Company operates through two primary verticals that will become separate listed entities: a Tech-Enabled NBFC (to be spun off as Niyogin Fintech) and a Payments Infrastructure business (iServeU). This strategic restructuring is designed to streamline corporate structure, enhance operational efficiency, and provide investors with distinct pure-play investment opportunities.

Tech-Enabled NBFC (NiyoginFintech Limited)

The lending arm employs a partnership-led strategy, collaborating with fintech platforms and local enterprise partners to extend credit solutions to MSMEs and underserved segments. Through its digital platform NiyoBlu and various fintech partnerships, Niyogin facilitates lead generation and provides digital access to credit and financial services. The business model leverages partner platforms for customer acquisition and collection, allowing Niyogin to focus on data-driven underwriting while maintaining low customer acquisition costs. With 88% of the loan book sourced through partnerships and alliances, the NBFC has built a scalable, high-margin, and high operating leverage potential, lending operation. The lending business is enhanced by proprietary AI capabilities through Niyogin AI, which automates KYC processes, improves underwriting, and provides process automation solutions. Niyogin AI has in turn acquired SuperScan which is an efficiency enhancement toolkit that helps companies streamline their workflows, enhance their customer service and reduce operational costs.

Banking tech Infrastructure (iServeU):

iServeU is a leading cloud-native technology infrastructure provider for the financial services industry, offering an integrated, full-stack platform that empowers banks, NBFCs, and fintechs to deliver seamless digital financial experiences. Through its proprietary tech stack—covering merchant acquiring, card issuance and management, financial inclusion, and digital lending—iServeU enables end-to-end transaction processing with scalability, compliance, and cost-efficiency. With over 1 million merchants onboarded, 238,000+ soundboxes deployed, and 95 million transactions processed in FY25 alone, iServeU has demonstrated rapid growth and consistent profitability. Backed by long-term contracts, marquee partnerships, and a reputed clientele, iServeU is well-positioned to shape the future of digital banking infrastructure in India and global markets.

Business Model and Strategy

Tech-Enabled NBFC (Niyogin Fintech)

Business Model:

Niyogin Fintech operates as a partnership-led, capital-efficient non-banking financial Company (NBFC), focused on delivering credit solutions to micro, small, and medium enterprises (MSMEs) and underserved segments across India. The business leverages a network of fintech platforms, local enterprise partners, and digital distribution channels to source customers, keeping customer acquisition costs (CAC) low and enabling scalable outreach.

Strategic Pillars:

Partnership-Led Origination The majority of the loan book is sourced through partnership and alliances with fintechs and enterprise partners. This model allows Niyogin to access differentiated data for superior underwriting, while partners handle customer acquisition and collection, driving high operating leverage.

AI-Driven Underwriting and Automation

Proprietary AI solutions automate KYC, streamline onboarding, and enhance credit assessment, resulting in improved risk selection, operational efficiency, and faster turnaround times.

Product Evolution and Cross-Sell Customers are guided from basic digital access to higher-value credit products, increasing engagement and retention. Integration with platforms like NiyoBlu and Moneyfront enables cross-selling of financial products, maximizing customer lifetime value.

Capital Efficiency and Scalability The model is designed for high scalability with minimal incremental costs, supported by disciplined cost management and technology-driven operations.

Revenue Model:

Niyogin Fintech generates revenue primarily through interest income on loans and fees from loan origination and distribution, with a focus on maintaining strong asset quality and sustainable margins. Furthermore, while Niyogin?s AI business is currently in its early stages, the Company is confident in its potential to become a strong independent revenue stream. 01

Payments Infrastructure (iServeU)

Business Model: iServeU is a comprehensive payments infrastructure provider, with a Banking-as-a-Service (BaaS) model, delivering a modular stack of APIs, SDKs, and device-based solutions to banks, NBFCs, and financial institutions. The Company?s offerings enable partners to embed banking, payments, and financial services directly into their customer-facing applications and touchpoints.

Strategic Pillars:

API-First Platform iServeU?s infrastructure is built for seamless integration, supporting rapid partner onboarding and high transaction volumes without performance degradation.

Expansive Product Suite The Company provides a wide array of services, including AePS, M-ATM, soundbox devices, point-of-sale (POS) terminals, UPI and BBPS platforms, card issuance, insurance, and more. This breadth creates multiple cross-sell and upsell opportunities for partners.

SaaS and TSP Revenue Model iServeU has transitioned to a high- margin Software-as-a-Service (SaaS) and Technology Service Provider (TSP) model, focusing on recurring, predictable income streams from device management, transaction fees, and technology service subscriptions.

Order Book and Market Leadership A robust order book and marquee client base provide strong revenue visibility and reinforce iServeU?s leadership in device deployments and digital payments infrastructure.

Innovation and Scalability: The platform is designed for adaptability, supporting the launch of new products and services, and is capable of scaling to meet the demands of large financial institutions and partners.

Revenue Model: iServeU earns revenue through device sales, transaction and service fees, SaaS subscriptions, and technology service charges, with a focus on increasing the share of high-margin, recurring revenues.

Products

Banking as a Service (BaaS) iServeU provides its partners with a comprehensive financial infrastructure and Banking-as-a-Service (BaaS) platform, featuring APIs, SDKs, and full-stack solutions. These offerings help partners expand their range of services. The APIs and SDKs are built for smooth integration with existing partner systems, while the full-stack solutions are ideal for those just starting out. With these BaaS tools, partners can develop a wide array of financial products, allowing them to deliver diverse financial services to their customers and establish themselves as all-in-one service providers.

iServeU supports three main categories of partners and also offers an advanced soundbox technology platform. This soundbox records transactions, sends them to the NPCI for validation, and then uses its switching capabilities to confirm and announce the completion of the transaction via the device.

Banking Correspondent Agencies (BCs)

BC Agencies, which operate through large networks of retail outlets or agents, are always looking for new ways to increase revenue from their existing infrastructure. iServeU helps these agencies by providing a suite of financial inclusion tools and transactional banking services. These solutions are used at customer touchpoints, such as local Kirana stores or agent kiosks, enabling BC Agencies to offer essential financial services to people in remote areas, thereby promoting financial inclusion.

Banks

Acting as a Technology Service Provider (TSP) or program manager, iServeU partners with banks to help them launch digital initiatives and expand their service offerings, ultimately boosting customer loyalty.

The technology stack provided by iServeU ensures that banks can deliver financial services efficiently and cost-effectively.

Neo-banks and Fintechs

Many fintech companies aim to expand beyond their core services. iServeU?s comprehensive product suite and plug-and-play approach allow these fintechs to quickly diversify and launch new financial services, often within just a few weeks.

iServeU Product

Business vertical	Merchant acquiring	Issuance / Card management system	Financial inclusion	Lending solution	Value added services
Products	• Merchant management system – online and offline channel	• Card issuance & management	• Agent banking	• Loan origination system	• Onboarding solution
	• POS, UPI, Soundbox solutions	– Prepaid cards, credit cards, debit cards, forex cards	• Mobile money	• Loan management system	• KYC checks
	• Bharat bill payment system (BBPS)	• Access control server		• Buy now pay later	•Reconciliation
	• Payouts			• Credit line on UPI	• Switching

Lending Business

Niyogin?s NiyoBlu platform is tailored for MSMEs and operates through finance professionals. It serves as an all-in-one digital channel for delivering a broad spectrum of financial services. Through NiyoBlu, Niyogin?s NBFC arm offers unsecured business and working capital loans to MSMEs. In addition to lending, Niyogin collaborates with top institutions to provide services like insurance and wealth management, allowing finance experts to deliver a unified suite of offerings to their MSME clients from a single platform.

NiyoBlu is built to enhance the experience for finance professionals by providing a rich set of resources, such as knowledge bases, product manuals, and analytical tools. The platform has brought on board over 6,375 finance professionals — primarily Chartered Accountants — each typically serving 100 to 150 MSME clients. These professionals are encouraged to submit their clients? financial needs on the platform. When a referral results in an MSME using a financial service, the finance professional earns a commission. Niyogin generates interest income when it underwrites a credit product directly, or earns a referral fee if the lead is passed to a partner institution. The Company?s Straight Through Processing (STP) system enables efficient, automated underwriting of digital leads, supporting business growth without extra resource costs and highlighting the effectiveness of its APIs in optimizing operations.

Credit Underwriting

Niyogin has developed strong capabilities in crafting underwritingprocesses that leverage unique and supplementary data. By working closely with each partner to customize these processes, Niyogin can accurately assess risk and reward, enabling steady expansion of credit programs at the partner level.

Business Updates

Key Organizational Updates

• Composite Scheme of arrangement & amalgamation approved by Board

• Tashwinder Singh appointed as the Executive Vice Chairman of iServeU while continuing in his role as Managing Director and CEO of Niyogin at the group level

• Aakash Sethi elevated to Deputy Chief Executive Officer of NFL Responsible for NBFC and Niyogin AI

• Sanket Shendure and Abhishek Thakkar have been promoted to President tasked with scaling the NBFC

• Successfully raised Rs.56.2 Crores from conversion of warrants • Acquisition of ‘SuperScan? toolkit

iServeU

• Signed an MoU with PAX Technology, India in November 2024 for soundbox solutions

• Product developed: Credit line on UPI stack, NPCI?s e-KYC Setu System to offer support for KYCprocesses

• Delivered UAT portal for Bharat Bill Payment System to Bank of Baroda

Key contract signed:

• Contracted as TSP for NSDL Payment Bank?s agency banking solution

• Bank of Baroda for deployment of Bharat connect platform for BBPS solution

• Axis bank for POS solution deployment pan India

• Canara Bank, Central bank of India, Bank of Baroda, Suryodaya SFB for soundbox solution deployment pan India

• 1,95,000 devices deployed (cumulative as of FY25 end)

• Secured prepaid card collaborations with Slingneo, trustid, growpee, dreamalligned and Ypay

• UPI business under program management is set to revive in FY26 with a new partnership with a leading payments bank

• Order book stands at

~Rs.400 Crores with 20 contracts to be executed in the next 5 years

Niyogin Fintech

• Incorporation of 100% subsidiary

‘Niyogin AI Private Limited?

• Partners onboard in partnership and alliance vertical: Rapipay, Okcredit, PayMe, Finsall and Gromor Finance

• Finance professional partner network stood at 6,375 in FY25, up 8% YoY

Financial Review

(Rs. in Cr)

Consolidated Profit & Loss Statement	FY25	FY24	YoY Change (%)
Revenue (ex-device sales)	273.3	194.3	41%
Total Income	309	198	56%
Expenses	331.3	224.1	48%
Adjusted EBITDA (ex-ESOP)	(8.6)	(14.8)	NM
Reported Pre-Tax Profit/(Loss) (A)	(22.3)	(26.1)	NM
Depreciation and Amortization	9.5	8.1	18%
ESOP (B)	3.2	3.0	8%
Non-GAAP PBT (C) = (A) + (B)	(19.0)	(23.2)	NM

• Our consolidated revenue for FY25 was Rs. 309.0 crores. Adj. EBITDA was negative Rs. 8.6 crores compared to negative Rs. 14.8 crores in the last year. Our non-GAAP PBT was negative Rs. 19.0 crores in FY25, compared to negative Rs. 23.2 crores in FY24.

• AUM stands at Rs. 278.8 crores, up 56% YoY.¹

• Revenue (ex-device sales) grew to Rs. 273.3 crores, up 41% YoY.

• The Gross transaction value (GTV) including payouts was Rs. 39,368 crores in FY25.

1 Including FLDG given for off book exposure of Rs. 19.9 Cr.

Key Financial Ratios

Particulars	FY25	FY24
Fee to Total Income (%)	43.1%	76.4%
Total Income to Total Assets (%)	54.1%	43.8%
Book Value ( Rs. )	29.6	30.2

Neo-Banking Solutions for India?s Remote Regions

India?s remote populations frequently encounter barriers to accessing conventional banking services. This challenge creates a significant opportunity to serve these communities through Neo-Banking models, which offer better economic viability compared to traditional physical bank branches. Neo-banks deliver comprehensive banking services entirely through digital platforms without requiring physical locations. In India, these digital banks partner with established financial institutions to create platforms that enable services like digital account opening and automated analytics specifically designed for MSMEs. This approach allows customers to access premium financial products and experience enhanced banking experiences. Such collaborations enable traditional banks to improve customer service while offering additional products at highly competitive rates.

Financial Inclusion Initiatives

iServeU is leveraging government and Reserve Bank of India (RBI) programs aimed at promoting financial inclusion. The government continues to strengthen all layers of the IndiaStack, reinforcing the digital infrastructure. As a result, iServeU has successfully provided seamless and reliable services to its MSME customers.

Partnership-Based Market Expansion

Both Niyogin and iServeU employ a partnership-cantered strategy that enables cost-efficient market entry. They work with diverse partners including Banking Correspondent Agencies, Neo-banks/Fintechs, traditional banks, and financial professionals like Chartered Accountants. This broad network of potential collaborators creates extensive opportunities for both organizations to expand their market presence.

Data-Driven Credit Assessment Innovation

Niyogin is advancing its credit evaluation methods by exploring cash flow-based lending solutions. As the MSME sector becomes increasingly formalized, Fintech companies are accessing cash flow data that can be used to assess MSME creditworthiness during loan processing. Leveraging this information not only speeds up the credit underwriting process but also helps maintain low default rates.

Risks, Concerns & Mitigation

Market Risk

Market risk refers to the potential for financial losses due to adverse fluctuations in market factors that impact income and capital. These factors include interest rates, credit spreads, exchange rates, commodity prices, among others.

Mitigation

The Company consistently updates its market risk management framework, which encompasses policies and procedures, to align with industry best practices and regulatory mandates. Niyogin?s dedicated risk management team actively oversees market risks and takes measures to mitigate exposure in the loan book portfolio. Additionally, the risk management team regularly performs stress tests across various asset categories to simulate the impact of potential market disruptions.

Credit Risk

Lending entities face the inherent risk of borrowers failing to fulfil their repayment commitments. Such defaults result in the loss of both principal and interest, elevated collection expenses, and interruptions in the lenders? cash flow. Additionally, traditional banks and Non-Banking Financial Companies (NBFCs) have historically been hesitant to extend credit to MSMEs due to their insufficient credit history and the absence of dependable financial records. Consequently, firms that provide loans to MSMEs are considered to operate with an elevated risk of default.

Mitigation

Niyogin employs a range of strategies to mitigate risks. The Company conducts thorough credit evaluations that take into account factors such as financial statements, cash flow, collateral worth, and borrowing history. Risk is spread out by diversifying the loan portfolio across various industries, geographical areas, and types of borrowers. The integration of technology, including data analytics and AI-powered decision-making processes, enhances effective risk management. These approaches are designed to ensure responsible lending practices, minimize the risk of concentration, and bolster the Company?s overall resilience and long-term viability in providing loans to MSMEs. Additionally, to identify and address potential issues, the Company regularly performs stress testing and scenario analysis on its entire credit portfolio.

Distribution Risk

Collaborating with partners who manage the distribution and availability of products at various sales points can lead to reliance on them. Consequently, there is a danger of significant business loss if a major partner decides to terminate the partnership.

Mitigation

Partners rigorously evaluate iServeU?s technological solutions before finalizing any agreements. After integration, iServeU?s systems become closely woven with the partners? existing infrastructures. The process of implementing these platforms throughout the distribution channels is an extensive effort led by the partner. Following deployment, agents typically require a minimum of six months to begin processing transactions on the platform. iServeU oversees the operational aspects behind the scenes, facilitating a smooth customer journey and achieving high rates of successful transactions. Additionally, iServeU contributes to customer retention by developing an extensive range of products that enhance the partners? ability to serve their clientele more effectively.

Digital Economy

The government is progressively focusing on transitioning towards a digital economy. Niyogin?s revenue, which is primarily transaction-based, is significantly propelled by products that facilitate cash to digital and digital to cash conversions, such as AePS, M-ATM, and DMT.

Mitigation iServeU expanded into exclusively digital transaction methods by introducing a prepaid card, UPI, credit card stack suite. iServeU is consistently driving innovation by exploring new revenue streams, such as the introduction of products like the soundbox, among other cutting-edge solutions. This addition means iServeU now encompasses all forms of transaction modalities.

Competition

Our target market and product segments comprise a diverse array of companies, from Fintech firms to conventional brick-and-mortar establishments, such as banks and nonbanking financial companies (NBFCs). Moreover, the rapid surge in Fintech prospects has led to the entry of numerous competitors into the market, launching ventures in areas that coincide or are akin to ours. As a result, securing market share and attracting customers in this divided market is expected to intensify rivalry among entities, unless a trend toward market consolidation emerges.

Mitigation

Our innovative technology platform infrastructure is strategically positioned to operate at a higher level compared to many market participants. Essentially, we are enabling a variety of brick-and-mortar businesses and Fintech platforms to deliver a suite of financial services products. In certain instances, we collaborate with these entities as partners. Additionally, our flexible cost structure maintains our competitiveness in pricing and facilitates rapid expansion or reduction of specific products as needed. We are contending with other Fintech companies by securing cost-effective market entry, which lowers our customer acquisition expenses. We capitalize on the extensive network of established partners to connect with our intended clientele and continuously improve our product offerings to encourage more cross-selling and ensure customer loyalty.

Technology Risk

The danger of experiencing operational disruptions and financial damages due to failures in IT infrastructure, loss of data, or security breaches affecting data.

Mitigation

Niyogin collaborates with a top-tier data centercentre provider, which has implemented multiple measures to prevent unauthorized server access and safeguard data. To mitigate the risk of data loss, Niyogin has established procedures for routine data backups. In the near future, Niyogin plans to engage an external party to perform Vulnerability Assessment and Penetration Testing (VAPT) to uncover any potential security weaknesses or vulnerabilities within the current infrastructure and applications.

Cyber Security Risk

The increased risk of cyberattacks and hacking incidents due to the growing usage of the internet and digital devices.

Mitogation

Niyogin has established firewalls, email security, and a range of other safeguards to reduce this risk. Additionally, the Company intends to provide education and training for its employees to defend against phishing and various other types of cyber threats.

Internal Control Systems and their Adequacy

The Company has an internal control structure that focuses on all procedures to validate the consistency of the Company?s financial accounting and reporting processes and compliance with all legal rules and regulations. Internal control mechanisms, accounting procedures, financial information, internal audit results, and other relevant fields, including their adequacy, are reviewed by the Company?s Audit Committee everyquarter.

Material Developments in Human Resources

Niyogin remains committed to attracting and retaining top-tier talent across all organizational functions. The Company has implemented a performance-based compensation structure that applies universally throughout the organization, ensuring that employee compensation & rewards are directly tied to individual achievements. This approach is consistently applied to both business leaders and functional managers.

The organization prioritizes continuous learning through upskilling programs to keep employees current with rapidly advancing technology. Niyogin?s human resources strategy focuses on developing a workforce that is motivated, efficient, well-structured, and properly trained.

To elevate talent standards, the Company has adopted several strategic approaches: building high-performing teams, fostering innovation, developing leadership capabilities at every organizational level, preparing staff for advancement opportunities, expanding talent acquisition efforts, and enhancing recruitment processes.

As of March 31, 2025, Niyogin?s total workforce comprised 575 employees across the consolidated organization, including its subsidiaries Moneyfront, iServeU and Niyogin AI.

Cautionary Statement

Statements in this Report, particularly those which relate to Management Discussion and Analysis, describing the Company?s objectives, projections, estimates and expectations, may constitute ‘Forward Looking Statements? within the meaning of applicable laws and regulations. Our Company undertakes no obligation or liability to update or revise any forward-looking statements publicly, whether as a result of new information, future events or otherwise actual results, performance, or achievements could differ materially from those either expressed or implied in such forward looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements and read in conjunction with financial statements included herein.

Disclaimer: All the data used in the initial sections of this report has been taken from publicly available resources, and discrepancies, if any, are incidental & unintentional.