“It is my firm belief that it can be the foundation to create a fintech hub in India to further galvanise creation of future skills, technology and jobs,”  said Rana Kapoor.
“It is my firm belief that it can be the foundation to create a fintech hub in India to further galvanise creation of future skills, technology and jobs,” said Rana Kapoor.

for fintech is abundant in India but managing burn is a concern in a country where the is still nascent and needs guidance, states a new study by Yes Bank, according to which low regulatory understanding, despite support from the government, is also a challenge.

The study ‘India Fintech Opportunities Review’ (IFOR) is based on a survey of 611 fintech companies, including 123 overseas companies over 90 days between November 2017 and January 2018.

In the sector which has grown from a largely digital payments business to wealth management, lending, and robotics process automation in the past few years, the survey found that 74% of startups had a burn rate between $,000 and $50,000 per annum, and that only 7% of them are profitable.

Burn rate guidance is a key requirement of fintechs, as per the study. “Several fintechs are already seeking mentorship or guidance on business modelling, fund management as well as managing burn rate. Around 21 of the 31 fintech participants sought mentorship in the last year on these subjects,” it said.

Fintechs in India are collaborating with banks for product and service innovation. Yes Bank CEO Rana Kapoor said that by integrating National Payments Corporation of India and India Stack APIs (application programming interface), banks are now more comprehensively addressing financially excluded segments, MSMEs, and others. “It is my firm belief that it can be the foundation to create a fintech hub in India to further galvanise creation of future skills, technology, and jobs,” he said.

Regulators and the government have made several interventions to simplify business regulations for but regulatory understanding is still low, the survey said. It said that government initiatives such as Jan Dhan Yojana, Aadhaar, and emergence of Unified Payments Interface provide a good foundation for fintechs to reach last mile touchpoints and boost financial inclusion.

“However, there is a need for better understanding of regulatory standards. 52% of respondents along with the 34 FGD (focus group discussion) participants cite understanding and meeting regulatory standards as a challenge in their day to day business,” the survey said.

India has more than 1,200 companies in the fintech sector.

“As per IFOR, 64% of these organisations have been in business for three years or less and median employee strength is 14 people. The sector is dominated by young entrepreneurs with 91% entrepreneurs coming from a STEM (science, technology, engineering, and mathematics) and 60% under the age of 40 and 7% of respondents have already turned profitable,” the survey said.



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