India + FinTech: The Alchemist's Formula

Over the past decade, India has experienced a remarkable surge in the FinTech landscape, marked by substantial growth in pivotal sectors such as Payments, Digital Lending, Insurance, and WealthTech. This has positioned India as the third-largest fintech ecosystem globally¹. According to a report from the G20 Global Partnership for Financial Inclusion (GPFI), India not only met but surpassed its financial inclusion target, achieving an 80% inclusion rate in just six years, a remarkable accomplishment that outpaced the initial projection by 41 years².

This noteworthy achievement can be attributed to the concerted efforts of the government, which has implemented various initiatives to foster financial inclusion. The government's commitment to financial accessibility is evident in initiatives like the Pradhan Mantri Jan Dhan Yojana (PMJDY), a flagship program aimed at ensuring every household has access to a bank account. The implementation of the Unified Payments Interface (UPI) helmed by NPCI (National Payments Corporation of India) has played a pivotal role in facilitating seamless digital transactions, contributing significantly to the growth of the FinTech ecosystem.

Alongside, the vibrant FinTech ecosystem has led to creation of successful digital payment companies who have launched wallets and payment platforms which are widely used (Google Pay, Paytm, Phone Pe). Simultaneously, the existing banks have upgraded to facilitate online, real-time and 24*7 banking services. 

India’s FinTech story by the numbers¹:

All these numbers are a strong testament to India’s rising fintech and digital market. (Also, do refer to my article earlier on India’s over development story: https://www.marketvector.com/insights/mvis-onehundred/india-s-economy-striking-the-right-chords) 

The MVIS^® Digital India Index (MVDIND), a modified market cap index ensures a pure-play exposure to the digital economy space of India was up 22% in YTD. 

MVIS^® Digital India Index

12/04/2022-12/04/2023

Source: MarketVector. Data as of December 4, 2023.

Source¹ https://www.investindia.gov.in/sector/bfsi-FinTech-financial-services

Source² https://fintech.global/2023/09/11/how-india-hit-its-financial-inclusion-goal-41-years-early/

Kinjal Shukla is the Index Researcher and Data Engineer at MarketVector. She is responsible for the design and development of MarketVector indexes and for creating data infographics. Kinjal has cleared FRM Level 1 having come from a risk profile in Barclays, India. She has a degree in a Master of Science in Financial Engineering from Stevens Institute of Technology, USA, and an MBA-Tech degree from NMIMS-MPSTME University, India.

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