The promise of financial inclusion in India has been around for a long time but never truly materialised. The vast majority of a billion-strong country is left out of the financial system, primarily due to lack of infrastructure and the dismal economics of servicing these customers. However, for the first time, there seems to be a genuine inflection point based on a combination of technology-led infrastructure (India Stack), favourable government policies, and entrepreneur-driven fintech innovation.
At Kalaari, we believe that India is on the cusp of large-scale innovation in financial services, which opens the door to creating massive markets for a range of areas such as consumer lending, small business credit, payments, trade finance, insurance, and health care financing, among others. We laid out elements of our thesis in a recent post The Parallel Universe of Indian Fintech.
As we engaged with fintech founders and industry participants, it became apparent that there is very little data on a rapidly evolving but nascent sector. We are grateful to the 350+ fintech founders and senior executives who proactively responded to this survey helping us collate granular data for the first time.
Here are some extracts:
1. 67% of fintech start-ups surveyed are deploying a hybrid “online + offline” strategy
2. Around 60% of start-ups are focused on a B2B or B2B2C model
3. Improving customer onboarding is stated as the top technology focus area by 66% of start-ups
4. Only 16% of start-ups have a “mobile only” strategy with 70% building a “mobile and web” presence to deliver their service
5. A significant 43% of startups already use Aadhaar as their primary means of customer identification
Download the full report here for all the data and analysis on founding teams, business models, customer acquisition channels, technology stacks, usage of Aadhaar and eKYC, funding needs, and much more. We have also included our viewpoints on findings, especially where we saw seemingly conflicting data points.
This report is part of Kalaari’s ongoing work in the fintech market in India. We hope you find it useful and welcome your feedback and inputs.