India has highest fintech adoption rate in world, says Piyush Goyal
Union minister of commerce and industry Piyush Goyal on Thursday said India is poised to become one of the largest digital markets in the world.
Addressing the 2nd Global Fintech Fest 2021 through video conferencing earlier in the day, Goyal said that at 87%, India has the highest financial technological (fintech) adoption rate in the world against the global average of 64%.
Goyal said that the India’s United Payments Interface (UPI) witnessed 3.6 billion transactions worth over $68 billion in August to make a record.
“As of May 2021, India’s United Payments Interface has seen participation of 224 banks and recorded 2.6 billion transactions worth over $68 billion and the highest ever — more than 3.6 billion transactions — in August 2021,” Goyal said, adding that “over two trillion transactions were processed using the AePS (Aadhar-enabled payment system) last year."
Goyal said India’s fintech industry came to the rescue of the people at the time of coronavirus pandemic, by enabling them to carry out critical activities from the safety of their homes, particularly during the lockdown and the second wave of Covid-19.
“As Prime Minister Modi says, ‘every crisis can be converted into an opportunity’, now citizens do not have to go to the banks, the banks have come to their homes and on their mobile phones,” the Union minister said.
Goyal stressed that India underwent a digital transformation in “mission mode” ever since Prime Minister Narendra Modi announced the Jan Dhan Yojana in his first Independence Day speech on assuming office, on August 15, 2014. “More than twwo crore Jan Dhan accounts were opened under the scheme which has been considered a world record,” he said.
“JAM (Jan Dhan-Aadhaar-mobile) trinity, besides DBT, has brought in transparency, integrity and timely delivery of financial benefits and services to India’s vast population. It has enabled India to leverage its technical capabilities for developing fintech sector," Goyal added.
The Minister said, under the National Broadband Mission soon every village in India will have high speed internet and this power can be leveraged to make India a Fintech Innovation Hub.
“I believe India is poised to become one of the largest digital markets with rapid expansion of mobile & internet networks. As India aims to become Aatmanirbhar, we want our industry & entrepreneurs to use local talent to produce globally marketable solutions, he said.
Fintech today has the potential to bring investments for mobile apps, e-commerce stores and several other digital infrastructures, the commerce minister said, adding, “Investment inflow in the fintech sector which has gone up to $10 billion since it started in 2016 has the huge potential to up the game and it will simultaneously enhance customer experience. Your strength will be augmented by the world’s third-largest startup ecosystem which is hungry for growth.”
Goyal said that the country needs to consume more and more fintech services as they grow proportionally with the expansion of their value chains.
“Our MSMEs have also rapidly adopted fintech solutions whether for credit, payments, accounting and tax filing, Goyal said.
The Centre recently launched the Open Credit Enablement Network (OCEN) and Account Aggregator (AA) framework. The government said these will enable formal credit flow to the most vulnerable segments, especially particularly small businesses, brings ease for financial institutions to reach large segments, by lowering distribution costs and now institutions can give smaller loans, with short repayment cycles.
Goyal highlighted that India is one of the fastest growing fintech markets with more than 2,100 such firms.
“A lot of Indian fintech markets are unicorns and India’s market is currently valued at $31 billion, and are expected to grow to $84 billion by 2025,” he said.