SVKM’s Narsee Monjee Institute of Management Studies Mukesh Patel School

of Technology Management and Engineering

CAPSTONE REPORT ON
Growth of Fintech in India

BY
Anant Jain (J213)
Jayesh Kumar (J217)
Aman Gour (K211)

TO
FACULTY GUIDE
Prof. Geetha Iyer
MPSTME, NMIMS

MPSTME, NMIMS
 1. RESEARCH OBJECTIVES
 Study of Fintech Industry: Growth and Evolution
 Lending’s in Fintech
 Mitigation of risk by fintech platform

2. Introduction
Money related organizations, monetary methodology, and budgetary administrations have radically advanced and
improved in the last couple of decades. With the development of the Fintech industry in India, the whole business
has experienced a huge change in the manner in which the money related methods are completed, and budgetary
establishments are performed.
The coordinated efforts between account and innovation have prompted an extreme change in banking, venture,
exchanging, and digital money. And that's just the tip of the iceberg. This development has prompted the ubiquity of
the term "Fintech", a short structure for the expression of Financial Technology. This post reveals insight into Fintech
and why has it turned fierce in the modern world.
Fintech is significantly more than only a reference to money related innovation. It is frequently alluded to as the
inventive innovation used to improve customary money related strategies and create powerful answers for
budgetary administrations, those which are at standard with the most recent mechanical patterns. Banking
programming and portable financial applications are great instances of improvement in monetary innovation

3. Literature Review

3.1 Fintech and future of fintech

Author: - James Guild
This paper argues that adopting a responsive regulatory approach, rather than an overly interventionist one, is the
most suitable framework for boosting financial inclusion through technological innovation. The case study method
allows for a detail-rich, qualitative comparison (using academic analyses, contemporary media accounts and Central
Bank data) of how the regulatory architecture impacted the adoption of Fintech to promote financial inclusion in
each case.
Conclusion: - The analysis conducted here suggests that intervening too forcefully to shape the market through
policy-making and regulatory intervention can produce unwanted effects, with no guarantee that the policy goal of
expanded access to finance will be achieved. fintech sector needs to make huge efforts in order to make its way
through its way through awareness in rural areas.

3.2 Growth Potential and challenges for fintech in India

Author: - Dr. Jatinder Kaur
The objective of the paper is to a discussion that put forward various growth potential and the challenges for the
fintech industry in India more than 70% Indian population resides in the villages and use of these digital payments
platforms are done by most of the urban people. FinTech industry is coming up with innovative and dynamic steps
mainly in the lending process of finance sector by use of financial technology. Indian customers are well known for
their conservative financial preferences and financial startup must work hard to inculcate confidence in them.
Conclusion: - Fintech ecosystem in India is in nascent stage but still have a lot of growth potential. fintech system are
planned to disrupt financial services industry. fintech industry must change the habits of Indian population specially
related with financial preferences to bring the revolution in the industry.
3.3 FINANCIAL INCLUSION: THE ROLE OF FINTECH AND DIGITAL FINANCIAL SERVICES IN INDIA

Author: - VINAY KANDPAL AND RAJAT MEHROTRA

India has been rising their Fintech developments, India is quite behind when compared to other countries. India has a
huge market for growth in this sector. However, there are many factors, which make it hard for the Fintech sector in
this country to rise and be equal to the more developed markets and economies. Fintech service firms are currently
redefining the way companies and consumers conduct daily transactions. Therefore, global investments into Fintech
ventures have been increasing at record speed – tripling to US$ 12.2 billion in 2014 from US$ 4.05 billion in 2013 and
reaching US$ 19.1 billion in 2015. In India, the scale has been much smaller but at similar growth rates – investment in
India’s Fintech industry grew 282 percent between 2013 and 2014 and reached US$ 450 million in 2015. India has a
large untapped market for financial service technology startups – 40 percent of the population is currently not
connected to banks and 87 percent of payments are made in cash.

Conclusion: -New technologies will not be successful until customers are satisfied with privacy and security aspects. It
also requires some time to earn confidence among the customers even it is easier and cheaper than the traditional
methods. Fintech sector to grow in a population as big as India’s population, we need a good connectivity. As we know,
India does not have that most of the population is still very new to the concept of smartphones and gadgets.

3.4 Financial Inclusion: Emerging Role of FinTech

Author: - Dr. M. V. N. K. Prasad, Associate Professor, IDRBT

Financial inclusion is an essential keystone for economic development. A survey indicates that for enhancing the
economic status of the financially feeble, a push towards financial inclusion is a critical step. It comprises of a collection
of activities such as insurance and savings and is not restricted to expansion of credit facilities. In 2005, experts observed
that financial services could garner profits with ‘low margin-high volume’ by inclusion of large number of people at the
bottom of pyramid. Therefore, banks need to relook at their business plans to make financial inclusion more possible
for low income groups. In addition, technology and other resources must be used in the ways possible to accomplish
the primary motto of financial inclusion. In rural areas of Vellore district, Tamil Nadu, a survey was conducted in 2008
to examine and determine distinct motivating factors for financial inclusion. By accumulating data from 20 villages of
Vellore, the researchers examined the reasons behind less number of accounts. The main reasons for lack of financial
access were identified to be poor literacy rates/higher illiteracy, unemployment and low-income levels. The survey
figured the necessity to increase financial literacy among rural people and create awareness about financial inclusion.

Conclusion: - However advanced be the technologies, the financial sector would not see expected progress until
financial inclusion benefits the underdeveloped. FinTech should play a critical role in enabling one and all have access
to the financial services which requires a ‘sustainable, collaborative and healthy financial ecosystem’.

3.5 Fintech issues and challenges in India

Author: - Dr.P. Krishna Priya and Dr.K. Anusha

The objective of the paper is to a discussion that put forward various growth potential and the challenges for the fintech
industry in India Adoption of Fintech among digitally active consumers. There are around 1500 Fin Tech startup firms
operating in India, and of these, nearly half were started in the past two years. Both technically and financially the fin
tech firms need to be groomed well. We can see most successful startups in a payments space, and it is expected the
same with the other financial segments as well.

Conclusion: - Fintech despite of having huge opportunities has still a tough path to walk on. Unbanked population, Poor
infrastructure in terms of Internet Connectivity and low literacy level are the other hindrances. Nearly 48% population
does not have bank accounts. Different frauds leading to loss of money in online transactions is a very hard bite to
swallow for the customers. People’s money is looted by the fraudsters by using technology and this has been a great
challenge in front of the fintech firms.
3.6 Fintech Industry in India: The Revolutionized Finance sector

Author: - Dr. P.Rajeswari and Dr. C. Vijai

The objective of the paper is to give overview of the Indian fintech industry and government supporting initiatives on
fintech industry. FinTech startup in India Fintech is the new financial industry that applies technology and innovation to
deliver financial services using new applications, processes, products, or business models provided as end-to-end
processes via the Internet. Fintech in India is especially advantageous, since the country boasts of an unrivalled youth
demographic which is rapidly growing.

Conclusion: -FinTech firms in India are setting new benchmarks for financial services in the country In India, fintech
industry is being encouraged by the various government initiatives such as Jan Dhan Yojana, Aadhaar and the
emergence of UPI which provide a good foundation to boost financial inclusion in India and Demographically.

3.7 Fintech in India – Opportunities and Challenges

Author: - Dr. C. Vijai

The main purpose of this paper accesses the opportunity and challenges in the fintech industry. It explains the evolution
of the fintech industry and present financial technology (fintech) in the Indian finance sector. The benefits of fintech
services reducing operation costs and friendly user. It also tells us about the technologies or tech-enabled trends that
facilitate current and future FinTech Innovations. Evolution of Fintech Industry, Global Fintech Financing Activity,
Investments in Fintech in India (sector-wise) Sectors in Fintech like Blockchains, Alternate Lending’s, Robo Advisory,
Digital Payments and Insurance Sector are few of the booming areas for Fin-Tech.

Conclusion: - The transaction value for the Indian fintech sector is estimated to be approximately USD 33 billion in 2016
and is forecasted to reach USD 73 billion in 2020 growing at a five-year CAGR of 22 percent. from a current USD 1.2
billion, as per NASSCOM. Financial technology innovation in India more advantage for the Indian economy, the fintech
services more secure and user-friendly. the fintech services reduce their costs for financial services.

3.8 Fintech, The New Era of Financial Services

Author: - David Varga

To see various definitions of Fintech, Its evolution, Key Growth Drivers of fintech, Evolutionary forces behind
exponential rise of Fintech. Data shows that Fintech Companies are focusing on innovating in the field of Lending and
Payment. Reducing distance is an important part of lending, as it helps to improve information gathering for both
lenders and borrowers. P2P lending platforms have opened the opportunity to non-professional investors and
households to provide funding for borrowers through leading platforms. Key Value Drivers behind FinTech’s (3 Layers).

Conclusion: - This article offers the conceptual understanding and groundwork to understand the rapid and successful
growth of newly emerging financial technologies. Actor-based Evolution of Fintech (3 Phases). Resource based evolution
approach (3 Layers). The exponential growth in the number of fintech companies can be explained with reference to at
least three distinctive evolutionary forces.

3.9 Role of FinTech in Accelerating Financial Inclusion in India

Author: - Brij Raj & Varun Upadhyay

The Reserve Bank of India defines Financial Inclusion as the “process of ensuring access to appropriate financial products
and services needed by all sections of the society in general and vulnerable groups such as weaker sections and low-
income groups in particular, at an affordable cost in a fair and transparent manner by regulated, mainstream
institutional players”. Digital Payments in India have seen an accelerated uptake following the government and
regulatory push for a less-cash economy. For FinTech’s, payments can be a pathway to other areas such as lending,
insurance, wealth management, etc. as digital payments can give them a history which can be leveraged in the other
areas.

Conclusion: - The key to success in FinTech is to harness the benefits while managing the risks. Therefore, we need to
have an appropriate regulatory and supervisory framework to facilitate the growth of this sector and to ensure that
FinTech continues to help accelerate Financial Inclusion in India. FinTech can reduce costs and improve access and
quality of financial services. However, we must strike a subtle balance between effectively utilizing FinTech while
minimizing its systemic impacts. By enabling technologies and managing risks, we can help create a new financial system
which is more inclusive, cost-effective, and resilient. The goal of universal Financial Inclusion in India can be achieved
only through synergistic efforts between the mainstream financial entities and other players like non-banking finance
companies, FinTech’s, etc. as they play a complementary role in championing this cause.

4. Research Framework

5. Research Methodology

a. Research Design
Research Design is a framework for the collection, processing and analysis of the data. Data collection will
include secondary data of NPAs of several banks, past performances of Fintech, comparison of different fintech
platforms and comparison between corporate and retail loans.

b. Data Collection Methods

For the purpose of this study, performance of fintech would be a key requirement. Also, the NPAs of
several banks would also be required so as to compare the risks of loans given out by banks to that of
fintech platforms. All of these data can be collected using secondary data collection method.

c. Methodology and Approach

The approach for this study will be:
 Study of Banking History in India, NBFCs: its types and structures
 Study of Fintech Industry: Evolution and Growth
  Lending in Fintech: Corporate or Retail, which should be preferred?
 Fintech as Debt Investment Products
 Analyze how Risk can be mitigated by fintech platforms

6. REFERENCES
1. Guild, James, Fintech and the Future of Finance (August 18, 2017). Asian Journal of Public Affairs, 2017 , Lee
Kuan Yew School of Public Policy Research Paper No. 17-20, Available at
SSRN: https://ssrn.com/abstract=3021684

2. Futue of FinTech: Innovative Business Model for Financial Inclusion. (2019). (n.p.): Book Bazooka Publication.

https://www.google.co.in/books/edition/Futue_of_FinTech_Innovative_Business_Mod/ECi-
DwAAQBAJ?hl=en&gbpv=1&dq=Growth+Potential+and+challenges+for+fintech+in+India+Dr.+Jatinder+Kaur+&pg=
PA37&printsec=frontcover

3. Varga, Dávid (2017) Fintech, the new era of financial services. Vezetéstudomány - Budapest Management Review, 48
(11). pp. 22-32. DOI https://doi.org/10.14267/VEZTUD.2017.11.03

4. Raj, Brij and Upadhyay, Varun, Role of FinTech in Accelerating Financial Inclusion in India (2020). Paper
presented at the 3rd International Conference on Economics and Finance organised by the Nepal Rastra Bank
at Kathmandu, Nepal during February 28-29, 2020, Available at
SSRN: https://ssrn.com/abstract=3591018 or http://dx.doi.org/10.2139/ssrn.3591018

5. Vijai, C. and Vijai, C., Fintech in India – Opportunities and Challenges (March 17, 2019). SAARJ Journal on
Banking & Insurance Research (SJBIR) Vol 8, Issue 1, January 2019, Available at
SSRN: https://ssrn.com/abstract=3354094 or http://dx.doi.org/10.2139/ssrn.3354094

6. https://www.idrbt.ac.in/assets/publications/Staff%20Papers/20190805_FT.pdf#page=87

7. https://www.researchgate.net/profile/Anusha-Kanagala
2/publication/350277951_Fintech_Issues_and_Challenges_in_India/links/60587a1fa6fdccbfeaf8b8e4/Fintech-
Issues-and-Challenges-in-India.pdf

8. Rangarajan C. Report of the Committee on Financial Inclusion. http://www.nabard.org/reportcomfinancial.asp,

2008.

9. Chakravarty S. R. and Pal R. Measuring Financial Inclusion: An Axiomatic Approach. IGIDR Mumbai.
http://www.igidr.ac.in/pdf/ publication/WP-2010-003.pdf, 2010.