The Finance Minister stressed that fintech firms should view rural India as a fertile ground not just as a social responsibility but as an opportunity to create new markets.
About Fintech Sector
- Fintechs—short for financial technology—are companies that rely primarily on technology to provide financial services.
- Fintech sector comprises Digital Payments, Alternative Lending (crowd funding), InsureTech, Wealth Tech (investment platform) and Enabling Tech (services using AI, big data to support fintech).
- India’s Fintech ecosystem is the 3rd largest in the world and growing at 14% CAGR.
Role of fintech sector in rural India
- Financial Inclusion: Mobile apps and digital wallets bring banking to the unbanked via UPI.
- E.g., Aadhaar-Enabled Payment Systems (AEPS).
- Access to Credit: Microloans using alternative data help farmers and small businesses.
- E.g., Agri-fintech platforms like CropFunds use transaction histories, farm outputs, etc. to assess creditworthiness of farmers.
- Agriculture Support: Apps offer market prices, weather updates, and insurance, linking farmers to buyers.
- E.g., Ministry of Agriculture’s AgriMarket Mobile App and Crop Insurance Mobile App.
- Digital Payments and Remittances: Low-cost, secure transactions and remittances reduce cash use.
- E.g., UPI-enabled apps (Paytm, PhonePe) are increasingly becoming popular in rural areas for transactions.
Challenges for fintech sector in rural areas
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