Fintech in India: Fintech Survives In The Frenzied Indian Economy

There are numerous disparities in India, for instance, both uncritical acceptance in astrology and technological applications exist side by side. Such coexistence represents the diversity of the country, a unique quality that intrigues global stakeholders. Surprisingly, the start-up network manages to evolve amid low literacy and income levels. India seconds the US as far as startup ecosystem is concerned. But when it comes to unicorns, there are 10 of them as compared to 56 in China and 100 in the US. That is why venture funds are short of India given its potential and size. Note that the country is number 28 in the VP and PE allure, ranking behind Austria and Thailand.

The obscure and transitional regulatory and taxation rules plus the absence of legitimate and civilized administration are the main rationales for India’s low ranking position. Obviously, the world would expect the country to remain behind the major economies as far as startups go. Nonetheless, there are more than 16,000 startups on board with a growth rate of 25% per annum, which is a noteworthy aptitude. This is the mystery of the Indian startup ecosystem.

Did you know that the number of Facebook users in India?

For instance, did you know that the number of Facebook users in India seconds to none? It stands at 251 million while the average revenue per user is $0.24 compared to $20, the global average; meaning that it is one of the lowest across the board. LinkedIn, Twitter, and Google follows suit with low revenues yet high subscription bases. As a result, the digital advertising sector struggles with sales just to remain buoyant. Fintech, being one of the booming industries all over the globe, has seen quite hysterical activity in India from venture funds as well as businessmen. However, financial incorporation is still a vague dream. In comparison to the global average per capital life insurance ($353), India stands at $46. The seepage of various financial services like credit cards and mutual funds is another aspect that lags behind with below 5% of the entire population. Given the low penetration rates, Fintech would have tremendous challenges in convincing people to obtain financial assets as opposed to venturing into electronic businesses. India comes number three when it comes to the number of Science and Technology graduates are concerned; yet it lags behind Estonia, Finland, and Israel in patents and R&D expenditure.

Poor infrastructure, underdeveloped business ambiance, and high price sensitivity

Of the Indian 10 unicorns, there are only two which are technology-based i.e. InMobi and Hike. A lot of similar paradoxes prevail across the economy, hence the funding and startups become even harder especially due to poor infrastructure, underdeveloped business ambiance, and high price sensitivity. Regardless of the drawbacks, there are some Indian sectors which have grown exponentially e.g. digital payment companies, hospitality, e-commerce, and transportation. These sectors have managed scalability issues and improved revenues in spite of the current hiccups of Indian business environment. While investors take their time to scrutinize the status of the economy to determine areas that would accommodate the next unicorns, Lead Angles strongly believe that some crucial changes made over the last 2 years (e.g. internet penetration, demonetization, and GST) have brought a unified network and market in India where clients and providers collaborate in a nation coupled with distribution issues. With the heightened nuclearization and urbanization of families as well as high aspirations, a modern spectrum of consumers is evolving in both rural and urban areas, having the same demands like the urban rich though at low prices.

Prolific products and services will also emerge

Most probably, a lot of companies will be formed with similar trends particularly in areas where consumer-leveraging technology is sought after to minimize the costs of production. Prolific products and services will also emerge where big investors haven’t been able to reach due to economic challenges. It is expected that the new firms will join the Fintech fraternity whose technology is geared towards minimal costs. Sectors that are more likely to benefit from the disruptive technology include transportation, entertainment, and food production. Innovations and cost reduction in these areas will satisfy the demands of the otherwise neglected sectors. These changes might be brought about by current stakeholders but there are potential challenges associated with startups, bringing in the paradoxes once again whereby innovative startups will be born amid the conventional bricks and mortar sectors, taking advantage of the existing technology instead of emerging from developed sectors such as software, artificial intelligence, or biotechnology. This will be contrary to the common beliefs and it represent the conundrum that surrounds India.

Disclaimer: The information on this site is provided for discussion purposes only, and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.
Salih Sarikaya is an award winning financial technology influencer and journalist for more than 10 years of experience. He has been recognized as one of the best tech influencers of USA in 2017 at CES, the world's biggest technology show. He has been honored with a top expert badge by Klout, social rating platform, in the areas of Business, Finance, Technology and Growth Hacking. Moz Social Ranking categorizes him as key influencer about the cryptocurrencies and fintech. He is a best-selling author with three published books. He is Professional Member of PEN America and Society of Professional Journalists. You can reach him at