RBI deputy governor releases the clear estimates for Fintech to scale and adapt more small ticket loans for better financial inclusion.
Recent statements from RBI Deputy Governor T Rabi Shankar at the IIMA Ventures’ Bharat Inclusion Summit have sent a clear and encouraging signal across India’s dynamic fintech sector. His insights clearly underscore what we on the ground have been experiencing and working towards: the vital and increasingly crucial role of fintech lenders, particularly in the realm of small-ticket loans, in driving genuine financial inclusion across the country.
It was particularly validating to hear the Deputy Governor highlight that a significant 45 percent of Indian fintech lenders are actively disbursing small-ticket loans under ₹25,000. This isn’t just a statistic; it represents a tangible shift in how credit is accessed and delivered, directly impacting the “credit” that has been denied credit access by the traditional institutions.
Integrating Technology into Finance
Our agility, technology, and customer-centric approach allow us to develop innovative models that make small loans accessible, convenient, and designed to the needs of individuals and small businesses previously excluded from formal credit channels.
The Deputy Governor also rightly pointed to the explosive growth of India’s fintech sector, now home to a staggering 13,500 companies, and an adoption rate of 87% – a figure that significantly outpaces the global average.
- It’s a reflection of India’s digital readiness and the widespread embrace of technologies like UPI, Aadhaar, Bharat Billpay, and FASTag.
- These digital public infrastructures (DPIs), which the RBI is actively leveraging, are the bedrock upon which fintechs can build scalable, low-cost, and interoperable financial services, lowering transaction costs and enhancing efficiency for everyone.
Regulations that Apply
The evolving dialogue between the RBI and the fintech ecosystem was another key theme. Governor Shankar’s emphasis on a decade of proactive engagement and intensified conversations over the past year resonates deeply with us. Moving from an initial “noticeable gap” to “frequent and productive conversations” is crucial. This collaborative spirit, which has led to the establishment of Self-Regulatory Organisations (SROs), signifies a mature approach where regulation is viewed not as a hindrance, but as a facilitator of responsible growth and best practices within the industry thus ensuring sustainable innovation.
Future Possibilities
Looking ahead, the RBI’s tech-forward approach, with a core theme of ‘e-payments for everyone, everywhere, every time’ for 2025, aligns perfectly with the fintech vision.
Initiatives like the Unified Lending Interface (ULI), the ‘mule hunter’ DPI for fraud detection, and the development of a digital intelligence platform for risk scoring are exciting examples of how technology continues to pave the way for a more secure and efficient financial landscape.
The potential of CBDC to revolutionize global retail payments, as noted by Governor Shankar, also presents intriguing future possibilities for cross-border transactions, transcending current limitations.
In conclusion
The RBI Deputy Governor’s address was a powerful affirmation of the fintech sector’s critical role in achieving India’s financial inclusion goals. The recognition of our impact in small-ticket lending, coupled with the acknowledgment of India’s high adoption rate and a deepening collaborative relationship with the regulator opens a positive direction for the future.. As fintechs, we are excited to continue leveraging technology and innovation to expand access to credit, empower individuals and businesses, and contribute significantly to India’s ongoing financial transformation. The journey towards complete financial inclusion is a shared one, and we are proud to be at its forefront.
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Frequently Asked Questions
What is financial inclusion and why is it important for India?
To channel government facilities to all and eradicate inequity of resources , thus aiding for long term economic stability of the country.
How are Fintech companies contributing to or disrupting traditional methods of financial inclusion in India?
Fintechs are extending the reach of financial services beyond traditional bank branches, particularly in rural and remote areas by increasing the accessibility of micro-loans, bite sized insurance products and digital savings.
What is the regulatory stance of the RBI concerning Fintechs operating in the small loans or financial inclusion space?
A primary concern for the RBI is ensuring that digital lending activities are conducted responsibly and that borrowers, especially vulnerable ones seeking small loans, are protected.
