Report: Indian fintech firms will oversee $1 trillion in assets by 2030

10 Aug 2022 , 12:34 PM

A recent study by venture capital company Chiratae Ventures and accounting firm EY India estimates that funding for Indian fintech firms reached $7.8 billion in 2021 and that the sector would manage $1 trillion worth of assets by 2030.

According to the research, $200 billion in revenue is anticipated from Indian fintech companies by 2030. Digital payment companies now receive the majority of investment. Fintech payment companies received $3.5 billion, or nearly 44%, of the $7.8 billion in total funding raised by the industry last year, the report stated.

Technologies including near-field communication (NFC) payments, soft point-of-sale (PoS) penetration, and central bank digital currency (CBDC) use cases are projected to propel new advancements in this area as India’s payment environment changes, according to the research.

The research claims that digital lending fintech companies will fuel half of the trillion-dollar AUM anticipated by 2030, with $515 billion in assets being handled by startups in the industry. In 2021, Indian lending fintech startups received investments of approximately $1.2 billion, an increase of nearly 71% from the previous year.

In an effort to impose stricter restrictions on the industry, the Reserve Bank of India is closely monitoring the operations of lending companies. Prepaid payment instruments (PPIs) cannot be loaded through credit lines, according to a letter from the central bank that was published in June.

The paper claims that models like the first loss default guarantee (FLDG), which increases the operational risk significantly, would give way to new models like co-lending, which will reduce risk.

According to the research, by 2030, wealth-tech fintech firms would manage $237 billion in investor AUM, with contributions from insurtech and neo-banking coming in at $88 billion and $215 billion, respectively. As of March 2022, India was home to 21 privately held fintech unicorns, or businesses having a valuation of $1 billion or more.