Untapped rural and semi-urban areas to drive India' s #fintech odyssey

According to a report by BCG and Z47 (formerly Matrix Partners India) Indian Fintech ecosystem is the third largest and one of the fastest-growing globally. Despite a dip in funding, the sector continues to thrive, with revenues surging to $25 billion in 2023—up by 56% year-on-year. The ecosystem is now in its “middle journey” and is poised for exponential growth and scale in the coming years. As the sector expands, companies must identify long-term capability enhancements and undertake initiatives to propel growth while managing rising cyber risks and frauds. 

The survey of 60+ founders and CXOs highlights that market share expansion and growth are key priorities along with an increased focus on profitability, unit economics, and governance. Furthermore, as the ecosystem matures, access to capital will be crucial; however, only half of those surveyed feel prepared for an IPO. The report noted that around 70 per cent of fintechs listed in India have had their share prices decline in six months of listing, highlighting the need for sustained performance.

Some of the top Indian fintechs are #Paytm, #PhonePe, #Zerodha, #Razorpay, #Cred, #Groww, #Acko, #Pine Labs, #MobiKwik, #BharatPe, #Open, #Oxyzo, #Clear, #Policybazaar, etc.The next phase of growth for Indian fintechs is expected to come from rural and semi-urban areas which remain highly underserved. According to the report serving rural and semi-urban areas would require phygital model with fintech leveraging ‘feet-on-street’ distribution and offline distributors enhancing operations with technology.