Fintech market in India to reach $1 trillion by 2030
India’s fintech market is booming thanks to several factors in the country, including favorable demographics, increasing technology adoption among citizens, higher disposable income, supportive regulators that encourage innovation, and more savvy and aware customers. The sector is estimated to reach $1 trillion in assets under management by 2030, according to a report published by Chiratae Ventures and EY. This is a tenfold increase from its AUM of approximately $100 billion in 2021.
Fintech in India is also expected to reach $200 billion in revenue by 2030 – also a tenfold increase from $20 billion in 2021. By 2030, the market is expected to grow to a book-sized $515 billion, according to the report, which counts payments, digital lending, wealth technology, insurtech and neo-banking as part of the market.
The space has also seen an increase in financing capital in the country. Fintech funding in India registered a three-fold jump in 2021, with more than $9 billion invested in digital lending over the past five years.
“The Indian Fintech market has been a formidable global force, contributing to the largest share of unicorns in India,” Sudhir Sethi, founder and chairman of Chiratae Ventures, wrote in the report’s foreword. “India is recognized as a global hub due to a mature funding ecosystem as well as supportive regulatory environment.”
Added Sethi: “With the growing impact of digitization, fintech has made strong in-roads, ushering the underserved and unserved into a new era of accessibility and linking India with one of the highest fintech adoption globally.”
Chiratae Ventures founder and vice-chairman TC Meenakshi Sundaram also noted in the report that India is the world’s third largest fintech market behind the US and China, with more than 21 unicorns as of March 31. Much of this is driven by a “large underpenetrated market across multiple financial services and favorable demographics.”
“Growing technology adoption, disposable income and awareness of wealth management avenues are fueling this growth, and FinTechs have been quick to capitalize on this interest with innovative solutions such as micro-investing,” Sundaram added.
Investors looking to tap into India’s fast-growing fintech market may want to consider EMQQ Globals India Internet and E-Commerce ETF (NYSE Arca: INQQ). Launched in April, INQQ aims to tap into India’s fast-growing digital and e-commerce sectors.
INQQ seeks to provide investment results that, before fees and expenses, generally correspond to the price and yield of the India Internet and Ecommerce Index. All securities eligible for inclusion must generate over 50% of their revenues from internet and/or e-commerce in India, have a minimum value of $300 million and a liquidity screen of $1.0 million in average daily turnover.
“India is an extraordinary investment opportunity and a key part of the e-commerce and digitization growth story in emerging and frontier markets outside of China,” said Kevin T. Carter, Founder and CIO of EMQQ Global. “You can think of this opportunity as ‘the next billion’ as India’s population gains affordable access to the internet for the first time via smartphones, changing the way people shop for food, clothing, access entertainment, bank, learn and more.”
INQQ has an expense ratio of 0.86%.
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