Indian fintechs and affiliated organizations are anticipating that the Union Budget 2024 will promote and empower firms to expand their reach beyond Tier-II locations, with a focus on assisting women-led enterprises. The fintech industry, which has seen regulatory reforms over the last year, expects the Budget, scheduled to be presented by Finance Minister Nirmala Sitharaman on February 1, to further encourage financial inclusion, empower micro, small, and medium enterprises (MSMEs) with lending solutions, and push for upskilling initiatives for the country’s young workforce.
Most people believe the Budget 2024, a Vote on Account, will have no noteworthy announcements. The Digital Lending Association of India (DLAI), an industry group for digital lenders in the nation, anticipates support in the shape of a specialized India Fintech Credit Fund (IFCF) to provide inexpensive financing to fintech enterprises.
Small and medium-sized Fintechs will require and expect support in the form of a specific India Fintech Credit Fund (IFCF), which is mandated to provide wholesale loans at a fair cost to digital lenders. Some of these new-age lenders are already expanding into Tier 4 cities and beyond, lending to a diverse range of clientele,” said Jatinder Handoo, DLAI’s CEO.
Handoo believes that IFCF, a fintech credit fund, will enable
The IFCF will be a significant milestone in the fintech ecosystem because it will encourage the horizontal spread of fintech lenders outside Tier-4 cities, the flow of credit to women, the inclusion of thin filers, and the expansion of the scope of formal finance,” he said. Companies expect provisions that will allow them to lessen their financial burden.
The budget should also include provisions to reduce the financial burden on fintechs and grant tax breaks to entrepreneurs in the field. Policies should incentivize the creation of a fertile environment for fintech firms to innovate and produce products and solutions that are more inclusive, adaptive for both consumers and businesses,” said Akash Sinha, Co-founder & CEO of Cashfree Payments.
India is a growing market for fintech companies. According to a survey published by the Centre for Advanced Financial Research and Learning (CAFRAL), nearly half of the 14,000 new start-ups formed between 2016 and 2021 were in the fintech business. The survey also indicated that fintech financing is expected to outperform traditional bank lending by 2030.