In the COVID-19 pandemic times, retail credit inquiry volumes in October 2020 were 81% of last year October levels. Enquiry volumes have improved in home loans as well as Loan Against Properties (LAP). Auto and 2W loans have also seen rebound in volumes due to shift in consumer preferences. Personal loan volumes are yet to rebound impacted by fintechs-driven growth during the pre-Covid time. State owned PSU banks have been the earliest to recommence lending followed by private banks. NBFCs have seen much slower recovery. Further, semi-urban and rural have seen better rebound. For Sep 2020, PSU banks inquiry volumes are at 1.2X yoy whereas private banks are at ~0.9X and NBFCs at 0.6X. Although slow initially, credit cards are now showing better traction. PSU banks have shown better growth pick-up compared to
With a huge population and its affinity towards the mobile / smartphones, India is one of the most attractive market for fintech disruption driven by increasing high speed internet penetration. Penetration of digital C2B [Consumer 2 Business] payments (cards, UPI, wallets) is expected to increase multi-fold to touch 1/3rd of the transactions by 2025. UPI payments are expected to grow at ~50% CAGR driven by UPI QR payments for merchants. Debit Cards & Credit cards are expected to grow at ~23% CAGR. Overall share of UPI is expected to increase 50-55% of digital payments by 2025, while cards would be 40-45%.
Sensing this opportunity a decade ago, Vijay Shekar Sharma ventured to found Paytm, the leading mobile payment platform with 150-200 Mn active users and 15+ Mn merchant having adopted the payments channel with 120,000 using its PoS terminals. Ambitions didn’t stop for Sharma backed by Venture capitalists such as Softbank, ANT Financials and
UPI mobile payments through mobile apps has been one of the biggest contributors to retail digital transactions in India. The pay mode now accounts for around half the retail digital transactions in volume terms, while its value share is around 10% (due to relatively small average per transaction value compared to NEFT/IMPS). UPI’s market share gains have mainly come at the expense of other traditional digital pay-modes such as NEFT, Credit cards and PPIs (pre-paid instruments like mobile wallets). Some contributing factors to the success of UPI have been Demonetization, mobile-first approach, instant bank-bank fund transfers, subsidy on transaction costs, growing penetration of mobile phones as well as Internet connectivity and early adoption by
The Digital Payments landscape in India has been revolutionized by the regulators and the banks’ proactive initiatives, e.g., IndiaStack and UPI. It is quite surprising that India has emerged as one of the most exciting markets for digital payments across the world. Last year, home-grown payment networks (RuPay and UPI) took a lion’s share of the total digital transactions, ~65%, showcasing how for once the Government efforts have been in the right direction for achieving targets.
Popular Payment methods are e-wallets, UPI, biometric payments, BharatQR code, and sound-wave-based payment technologies. One of the primary reasons can be attributed to the forward-thinking of central & state governments and Reserve Bank of India for successfully bringing a digital payment revolution in India. Buoyed by the success of Virtual Payment Address – UPI (it’s like your e-mail id), Google wrote to the US Federal Reserve, about UPI model adopted in India and recommended creating
COVID has been disastrous for Individuals who work for businesses heavily involved in sectors like travel, tourism and entertainment. They have felt the impact most directly with loss of bonus and other incentive pay often followed by temporary or permanent job loss. As the economic contraction turns into a longer-term economic recession, one can expect high unemployment figures to continue, along with lower salaries as more job seekers compete for fewer available jobs.
This is bound to have an impact on one’s levels of debt, especially on credit cards. If you have available credit on your credit cards, and you need money, you may want to use your credit card limit and make minimum amount due payments (rather than pay the card dues off in full). But credit cards typically charge very high interest rates. This increase your outflow and also increases your card limit utilization ratio. This can decrease your CIBIL score.
The credit utilization ratio plays a
In the midst of a deep down consumer financing crisis by Indian Fintech Startups, guess who is at the Gateway of India, Mumbai asking for NBFC license to operate in the Indian FinTech space. Yes! More than 2 dozen Chinese Dragons are waiting at the RBI gate in Mumbai.
What’s so special about Chinese Fintech Companies ?
Flush with funds, they target customers in the sub-prime segment [No CIBIL Score or a Score of just 500-550] and offer small-ticket loans (mainly pay cheque loans) which are short term in nature and profitable. There has been a regulatory clampdown in China last year which