With a rising digital population, the fintech industry has seen a meteoric rise over the past few years. An industry that saw accelerated growth post demonetisation continues to grow with the government itself betting big on UPI. The scope of the industry has also been vetted by the fact that global players from PayPal to Google and WhatsApp have entered the payments space in India.
Now with the Interim Budget around the corner, the fintech players in the country are hoping for sops from the government in the form of incentives for digital payments, upgradation of digital infrastructure, financial inclusion and easy regulatory processes.
Digital Adoption
Harshil Mathur, CEO and Co-Founder, Razorpay says that the past year has been fairly interesting seeing Indians become more comfortable with making C2G payments online, and with RBI's efforts of forming a committee to deepen digital payments in the country as well. Apart from the angel tax issue that every startup in the country is hoping for action against, Harshil also wants steps taken to increase adoption of online payments. “Considering how UPI is being embraced by businesses and consumers which is resulting in larger transaction volumes and increased Person-to-Merchant (P2M) adoption, it will be good if the government starts taking steps towards making UPI the de-facto mode for all online payments soon," he adds.
Sharing a similar view, Sangram Singh, CEO, Freecharge hopes the budget can encourage the upgradation of digital infrastructure and digital literacy, especially in small towns and rural India, which will help drive financial inclusion through digitization, which will strengthen the growth the industry has been seeing. “Some of the recent initiatives such as UPI 2.0 and tokenisation provide a good opportunity for banks, e-wallets, and other players in the fintech sphere to promote digital adoption,” he says.
Financial Inclusion
Harshil too, is of the opinion that financial inclusion should be encouraged. “It's important for the government to recognise the immense potential that fintech lenders hold in furthering financial inclusion and credit penetration and should encourage them with prudent policies to benefit the sector. Overall, I hope the upcoming budget continues to incorporate new policies and regulations that will create new opportunities and boost our digital payment ecosystem,” Harshil says.
With financial inclusion also comes the need of extending credit to medium and small enterprises (MSMEs). Bhupinder Singh, Founder CEO of Incred says that NBFCs have increased their overall market share in MSME credit by around 17% YoY till a mid-last year, whereas private sector bank's share only increased by 6.4% and public sector bank's decreased by around 9%. Similar results can be seen in consumer credit. “Having said that, we strongly believe that the budget should have some subsidies for the MSME segment and credit support to enable them to continue growing and borrow effectively for that. It will help in bridging the prevailing credit gap and acquaint our nation with experience superior growth rate while tangibly increasing the employment opportunities,” he says.
In order to mobilize access to credit, empowering fintech companies that facilitate them is also important, opines Alok Mittal, CEO and co-founder of Indifi Technologies. “For instance, extending credit guarantee schemes such as MUDRA and facilitating better data access to alternate lending companies can help in bolstering the impact and reach of these initiatives. Doing so can ensure high growth potential for MSMEs in India - being one of the most dynamic and critical sectors of the nation’s economy."
Keerthy Kumar Jain, co-founder of AnyTimeLoan says that to create a credit inclusive society to drive consumption and growth, the government should also encourage peer-to-peer lending platforms. “Government should allow incremental savings via lending on P2P platform up to Rs 1 lakh as this will enable or bridge huge gap between the formal credit system and informal credit system and create a credit inclusive society,” he adds. Apart from this, Keerthy also hopes that tax slabs will be increased so that more money is available in public hands, which will further increase purchasing power and savings.
Easier regulatory processes
Kumar Abhishek, CEO and co-founder of Amazon backed ToneTag says that startups are expecting a faster and easier method for procedural clearance and license approvals. They are also looking for an increase in allocation of funds towards the adoption of new technologies such as AI and Blockchain. “With the success of the Digital India scheme, the industry is looking for an allocation of adequate funds to further the cause. Startups are also expecting a decrease in unnecessary regulatory supervision and government interference which will allow them to operate without any pressure. Increase investment in training, research and skill development in areas like Big Data, IOT, Robotics, and other digital tools, will act as a facilitator of the startup growth. With the Union Budget around the corner, the startup sector is keenly awaiting the policies the government will lay down,” Kumar adds.