Indian fintech market to touch $1 trillion in AUM, $200 billion in revenue by 2030: Report
India’s Fintech sector, the third largest in the world, is expected to grow tenfold this decade, touching $1 trillion in assets under management (AUM) across lending, asset management and insurance by the year 2030, according to a new report by Chiratae Ventures and EY India.
As of 2021, the total AUM of the Indian Fintech market (excluding payments) was around $102 billion. The payments landscape alone is expected to touch transaction volumes of $100 trillion by 2030.
Asked in digital lending
This report – $1 Trillion India Fintech Opportunity – highlighted that fintech sector revenues (including those from the payments space) are projected to grow to $200 billion by 2030 from around $18 billion in 2021. Much of the growth in the fintech sector will be driven by the digital lending market , which is expected to grow to $515 billion in book size by 2030, from a level of $38 billion in 2021, the report noted.
Digital lending revenues are projected in the report to grow to $105 billion by 2030 from the level of $8 billion in 2021. Digital lending growth will be driven on the back of customized segment-specific solutions, according to the report. By 2021, digital lending cost more than $1 billion in investment.
Home to 21 Fintech Unicorns (out of 2100+ fintechs), India is now recognized as one of the largest Fintech ecosystems.
Developing marketplace
The report said co-lending is likely to evolve as a marketplace model that helps lending partners reduce their risk exposure.
“In the future, we expect co-lending to emerge as a marketplace model that supports lending partners to reduce their risk exposure. Fintechs and traditional lenders need to collaborate with each other. It has already started,” said TC Meenakshi Sundaram, Co-Founder and Vice President, Chiratae Ventures. Business line.
Chiratae Ventures India Advisors is a technology advisor to venture capital funds. The funds advised by Chiratae Ventures India advisors have a total of close to $1 billion under management and 110+ companies invested in SaaS, Consumer Media & Technology, Health-Tech and Fintech.
The report highlighted that payments, digital lending, wealthtech, Insurtech and Neo-banking will all contribute to growth in the Fintech space with Agri+Fintech and Prop+ Fintech considered to be big bets. Also new asset classes, Crypto & NFTs will continue to attract investor interest.
When asked if he sees fintechs “eating” into the lending business of traditional banks, Sundaram replied negatively. “I don’t think fintechs will eat into the loan book of traditional lenders. We see their coexistence. We don’t think that fintech will suddenly come and take over the market, he added.
Flexible regulators
Sundaram said he was confident regulators would keep up with the industry. “We expect them to be sometimes a little ahead and sometimes a little behind. Later will be more when it comes to protecting the end consumer. Over the past few years, regulators have become far more nimble in meeting the demands of the industry, he said.
The report also highlighted that a lot of activity is expected around WealthTech and InsurTech. New sub-segments are going to be innovated by fintechs with new class products. An example of this is the fractionation of investments to potentially meet the needs of a new class of investors that is emerging now.
The report also said that Buy Now Pay Later (BNPL) has gone mainstream, and is on an accelerated growth trajectory, emerging strongly not only in B2C but also B2B payments. BNPL, which reached a GMV of $3 billion in 2021, is projected to have a GMV of $35 billion by 2026, according to industry estimates.
Published on
9 August 2022
