Indian fintech start-up funding fell 40 per cent in 2022 due to the global economic slowdown and the war in Ukraine, according to a report by IIFL Fintech. However, the total funding of the fintech sector reached $39 billion in 2022.

The Indian fintech market is expected to cross over $1 trillion by 2030. India has emerged as a global fintech superpower, and is now ranked No. 3 in terms of total fintech companies, said the report. 

The Indian start-up ecosystem is expected to see another record year in terms of the number of ventures receiving private capital. While big late-stage investors are staying on the sidelines due to the derating of the global tech sector and the caution of investors in new domains such as cryptocurrency and the metaverse, the early-stage ecosystem is buzzing with activity.

According to the report, the digital lending market is expected to grow to $515 billion by 2030. The book size of Indian digital lending companies is set to grow from $38.2 billion in 2021 to nearly $515 billion by 2030, a 33.5 per cent increase in CAGR.

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Mehekka Oberoi, Fund Manager, IIFL, said: “Indian fintech industry have come a long way from the mid-1990s when online banking services were first introduced. The fast adoption of the mobile phone coupled with cheap Internet access has meant that masses in India have taken to payment apps and on-tap credit solutions. Fintechs have become a ‘one-stop shop’, addressing shortcomings of the traditional financial services industry on one hand, and innovating to create superior experiences.” 

The volume of PPI transactions has grown from 493.92 crore in FY21 to 658.12 crore in FY22 and 746.67 crore in FY23. The total value of PPI transactions rose to ₹2.94 trillion in FY22 from ₹1.98 trillion in FY21, before recording a dip to ₹2.87 trillion in FY23, report noted. 

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The Indian fintech industry has taken the RBI guidelines in its stride as suggested by the disbursement data for the third quarter. Data released by the Fintech Association for Consumer Empowerment (FACE) show that disbursements grew 118 per cent year-on-year and 2 per cent sequentially to ₹18,537 crore in the third quarter of FY23 in terms of value. In terms of volume, the growth was 147 per cent year over year and 6 per cent sequentially.

With inputs from BL intern Shayna Cedric