Fintech lenders will have to change their business models to survive the ongoing liquidity crisis.
AMIT KUMAR, Co-founder, GalaxyCard, a digital credit card start-up, had just gone live with a non-banking finance company (NBFC) when the IL&FS default crisis erupted in September 2018. The NBFC, which had started discussions with GalaxyCard in January 2018, had big plans but changed its mind. “Nine months of integration, legal paper work and banking transactions went for a toss in just 10 days,” says Kumar. Many NBFCs that had tied up with fintech firms or were in the process of doing so are not even willing to talk, says Kumar. As a result, a lot of fintech lenders are finding it difficult to raise funds. Some are even closing down.
The liquidity crunch has put a spanner in the works for such firms despite the fact that the potential market of millennials and salaried professionals remains. Akshay Mehrotra, Co-founder and CEO, EarlySalary, sees a huge untapped market in consumers with credit scores of less than 750 and loan size below Ì€ 1 lakh for less than one year tenure. “The salaried individual segment is a 4.5 lakh crore opportunity (by 2023/24) based on 201 million individuals,” he says.
India is the second-biggest fintech hub in the world, after the US, with 2,035 start-ups in the sector against just 737 in 2014, according to the India Fintech Report 2019 by Medici.
However, fast paced growth in a short span doesn’t guarantee sustainability. China’s peer-to-peer (P2P) lending segment flourished in the past four-five years but witnessed multiple defaults from June 2018 after it surfaced that a few P2P operators had duped investors. Thousands of platforms disappeared over two years.
In India, regulations are trying to put things right.
Road to Regulations
Bu hikaye Business Today dergisinin June 30, 2019 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Business Today dergisinin June 30, 2019 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
"Focus on the challenge of each customer"
SHASHANK KUMAR MD & CO-FOUNDER I RAZORPAY Razorpay is India's first full-stack financial solutions company
PEDAL ON THE FUTURE
THE MG WINDSOR EV, WITH ITS FUTURISTIC AND MINIMALIST DESIGN, COMBINES THE BEST OF BOTH WORLDS-COMFORT AND TECHNOLOGY
BREATHE EASY
Whether you're battling allergies, looking to remove pollutants, or simply want to breathe easier, the right air purifier can make a difference
The Taste of India in a Glass
FROM ROYAL LIQUEURS TO DISTILLED MAHUA, INDIAN HERITAGE ALCOHOLIC BEVERAGES ARE HAVING THEIR DAY IN THE SUN
LOOK BEFORE YOU LEAP
IN 2025, INVESTORS WILL NEED TO FACTOR IN VOLATILITY ACROSS ASSET CLASSES
MISSING ADVISORS
INDIA HAS JUST ONE INVESTMENT ADVISOR FOR NEARLY EVERY 200,000 INVESTORS. AT A TIME WHEN RETAIL PARTICIPATION IN THE STOCK MARKETS IS BOOMING, THIS ASSUMES SIGNIFICANCE
TURNING A CORNER
SHARED ELECTRIC MOBILITY START-UP YULU'S SHIFT TO SERVICING THE QUICK COMMERCE SECTOR IS HELPING IT GROW FAST. IT IS NOW FOCUSSING ON IMPROVING ROAD SAFETY FEATURES AS IT TURNS EBITDA POSITIVE
REALITY CHECK
INDIAN STOCK MARKETS PLUNGED BEGINNING OCTOBER FOR A HOST OF REASONS, INCLUDING A FALL IN FII OWNERSHIP. HOW DEEP WILL THE CORRECTION BE?
TRUMP'S TRADE TANGO
The return of Donald Trump as the 47th President of the US has put the global economy on edge. India, too, is unlikely to remain unaffected. How will policymakers meet this latest challenge?
"The essence of the Trump administration will be transactional”
Global investor, analyst, and best-selling author Ruchir Sharma decodes why Donald Trump won the elections, what India should do, the risks, and more