A recent report by auditory firm KPMG has found that India`s investments in FinTech dropped significantly in 2016 as compared to 2015.According to
A recent report by auditory firm KPMG has found that India`s investments in FinTech dropped significantly in 2016 as compared to 2015.
According to the study named The Pulse of FinTech Q4 2016, investments in the sector dropped from $1.6 billion in 2015 to $216 million in 2016. Still, India continues to appear in the focus of venture capital investors in Asia, as cryptocoinnews.com explained.
“Total investments in fintech declined globally in 2016, reflecting the significant amount of uncertainty that plagued the broader investment market. The ramifications of the Brexit vote in the UK, the US presidential election, a perceived slowdown in China, and significant exchange rate fluctuations along with other local factors, all conspired to make investors more cautious throughout much of the year. Total fintech funding declined almost 50 percent, falling to $25 billion from $47 billion invested in 2015”, stated the report, page 7.
As for the decrease in India, the report highlights the impact a lack of mega-deals can have on a country, as actual deal volumes in the country remained steady over the period.
“Q4`16 demonetization efforts resulted in an increase in transactions for both payments companies and mobile wallet providers. This trend will be one to watch in Q1`17 and Q2`17, as it may spark additional interest from investors”, said the report, page 78.
Also, corporate interest in fintech in India is expected to rise in the next year. Some banks and companies have already set aside funds for collaboration with fintechs, as the report observed.
The deputy governor of the Reserve Bank in India, SS Mudra, has recently said that banks need to keep up with FinTech; otherwise, they risk to become a history.
“My vision of a fintech-enabled banking system is one in which a micro entrepreneur receives an online bank credit early in the morning, which she utilises for buying her wares from the wholesale market, sells them during the day, receives payment from customers in electronic form, pays back the bank loan at the end of the day and gets the surplus credited to her linked savings account.”, commented Mudra in an interview with Bloomberg Quint.