NEW DELHI: Vivifi, an RBI-certified non-banking finance company (NBFC) that enables easier and more direct access to credit for the underserved communities in India, offers sachet sized loans to customers who have the ability and intent to repay. Based on the loan repayments of these customers, the company then increases their credit limit to help them improve their credit score and eventually get access to larger loans. Founded in 2017 by Anil Pinapala (founder & CEO) and Srinath Kompella (co-founder & COO), the Hyderabad-based startup has disbursed over Rs 200 crore credit till date. Here, Pinapala talks about the performance of the fintech industry during the pandemic. Excerpts:
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How Vivifi is performing amidst the rise of the second wave of infections?
We continue to stay strong but are also being cautious with the increase in the number of cases and a potential lockdown that might affect the business. While the demand continues to be robust, we are treading this wave cautiously.
What is your growth strategy and vision for 2021?
The USA’s economic growth post-Vietnam war was driven by the availability of retail credit cards. In India too, retail credit will play a pivotal role in making it a 5 trillion-dollar economy by backing and boosting consumption levels. In sync with this vision, we at Vivifi have launched FlexPay, India’s first digital credit card offering credit (as low as Rs.500) by leveraging the sophisticated payments infrastructure in UPI 2.0. We have also adopted a completely remote and form-less onboarding process, which is based on video, voice and images along with video-based KYC.
What are the new trends that you are witnessing in the personal loan segment?
The demand for personal has only grown over the years, especially among the low-income families and borrowers, who mainly avail of these loans for consumption purposes. All fintechs popping up these days target young and low-income people who are digitally savvy and seek short-term credit solutions for pursuing various aspirations.
Besides, we are also seeing innovations like buy now pay later, allowing users to shop without worrying about money and later repay the amount in easy EMIs. These new products have made credit accessibility easier and more seamless for people across India, who earlier faced reluctance from formal lenders and hence ended up taking credit from indirect sources at high-interest rates.
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Other unique features of personal loans include flexible repayment options, quick disbursals, 100% digital customer onboarding, multiple repayment modes, and higher transparency levels, among others, which have completely changed the face of personal loans and how these were perceived a few years ago. We are now seeing a distinct trend where customers are preferring products that offer flexible payment options and also a flexibility to withdraw whatever they need whenever they need it, which is being offered by Line of Credit products.
How is the overall recovery in the fintech industry?
The Indian fintech ecosystem has grown rapidly, even during the pandemic. We have seen an exponential growth in digital lending which is poised to tremendous adoption in digital payments. Given its impressive growth trajectory, the sector even holds enough potential to drive recovery for the entire country. And this can be achieved by strong collaborations between banks and fintech players to craft and offer the best customer experience, catering to their emergency needs at a critical juncture like this.
The pandemic has, in fact, given a push to every bank and fintech to innovate further and address the pain points of customers using state-of-the-art technologies. With such an approach, the fintech industry is expected to exponentially grow over the next five years.
Tell us about Vivifi’s key products – FlexPay & FlexSalary.
FlexPay enables users to make payments for purchases using the ‘scan now, pay later’ option on UPI. This solution is designed to cater to non-prime and low-income borrowers who usually depend on indirect sources of funds – like friends, family, or unlicensed lenders – during a cash crunch. It is also useful for kirana stores that offer small-ticket credit to customers to retain them. It is the only payment system in India that provides credit on UPI, enabling a true digital credit card experience for hundreds of millions of customers and millions of merchants who stayed outside the ambit of traditional credit cards.
FlexSalary is another gateway product by Vivifi that provides customers with an unsecured personal emergency line of credit. It’s more like an instant personal loan that comes with unique features such as digital onboarding, seamless one-time approval, quick disbursal, flexible repayments, zero prepayment penalties, etc. An individual can take a loan up to Rs 2 lakh for any length of duration, repay it with interest and continue using the same for various purposes.
FAQs
Estimated CAGR of fintech market in India 2022-2030, by segment. Investment tech is anticipated to be the fastest growing fintech sector in India growing at a rate of 30 percent during 2022 and 2030. Followed by fintech SaaS sector growing at CAGR of 27 percent.
How has fintech evolved in India? ›
Rise of FinTech in India. The number of startups in India has grown significantly over the past few years. The number of newly founded startups has increased from 733 in 2016–17 to over 14000 in 2021–22, making India the third largest startup ecosystem in the world after the US and China.
What is the status of fintech sector in India? ›
India is amongst the fastest growing Fintech markets in the world. Indian FinTech industry's market size is $584 Bn in 2022 and is estimated at ~$1.5 Tn by 2025. The Payments landscape in India is expected to reach $100 Tn in transaction volume and $50 Bn in terms of revenue by 2030.
What are the problems with Fintech in India? ›
Fintech startups in India encounter several challenges, including regulatory hurdles, limited access to capital, technological infrastructure constraints, difficulty in finding and retaining talent, market penetration issues, economic factors, customer acquisition and retention challenges, scalability issues, and the ...
Is fintech fast growing? ›
Second, despite short-term pressures, fintechs still have room to achieve further growth in an expanding financial-services ecosystem. McKinsey estimates that fintechs will grow at roughly three times the overall banking industry's growth rate between 2022 and 2028.
Which is the biggest fintech in India? ›
Top Fintech Companies in India
- Paytm.
- PhonePe.
- PayPal.
- Intuit.
- Stripe.
- Visa.
- Slice.
- Wise.
For one, fintech provides Indians with access to financial services that they might not otherwise have. This is especially true for rural and underbanked populations who often don't have access to traditional banking products and services. Fintech also helps to drive down the cost of financial services.
What is the objective of fintech in India? ›
Fintech initiatives aim to bridge the gap between the banked and unbanked populations by providing access to essential financial services such as savings accounts, payment solutions, and credit facilities.
How much does fintech contribute to India's GDP? ›
India's fintech sector has emerged as a cornerstone in the nation's economic framework and is expected to contribute an additional $400 billion to the national economy in the next seven years.
Is India a fintech hub? ›
"The study reveals that vibrant hubs such as Singapore, the UK, the US, and India have hosted a thriving cluster of fintech corporate headquarters. "Among the countries surveyed, the most significant operating countries for fintechs include the US, the UK, Singapore, Mexico, and India," it added.
The global fintech industry is booming, with customer demand driving growth. In developing nations, digital innovation by fintech companies has allowed entire economies to bypass the high-street bank system, and offer a multitude of options to people who would likely be excluded from traditional banking systems.
How are fintech companies valued in India? ›
Alternatively, fintech valuation can be derived through an AUM multiple, which factors in the total value of assets managed by the startup. In India's fintech landscape of 2024, AUM multiples typically range from 2-4x, providing investors with a benchmark for assessing the intrinsic value of a startup's asset base.
How does fintech affect financial inclusion in India? ›
Fintech companies are playing a very important role in promoting financial inclusion in India. They are reaching marginalized and underserved populations to provide access to financial services, like banking, credit, and insurance.
What is the disadvantages of fintech? ›
Disadvantages of Fintech:
up. This means that there may be regulatory issues that fintech companies need to navigate, which can be time-consuming and costly. their systems are compromised, it could result in fraudulent activity.
How does fintech affect banking sector in India? ›
Fintech has successfully penetrated the unbanked and under-banked segments of the population, where traditional banks have struggled. User-friendly, adaptable, and multilingual mobile banking interfaces have promoted transparency and financial inclusion, expanding the consumer base and driving economic growth.
What is the average growth rate of a fintech company? ›
The global fintech market is projected to grow at a CAGR of around 20% between 2021 and 2026. The global insurtech market is expected to grow at a CAGR of 48.8% from 2021 to 2028, driven by the increasing adoption of digital insurance solutions and the need for personalized insurance products.
What is the growth rate of finance industry in India? ›
Bank Credit
Lending by non-banking financial companies (NBFCs) accelerated, led by personal loans and loans to the industry, and their asset quality improved. Credit disbursal by SCBs stood at ₹164.3 lakh crore, growing by 20.2 per cent at the end of March 2024, compared to 15 per cent growth at the end of March 2023.
What is the job growth rate for fintech? ›
Why start a career in fintech? One of the most attractive features of the fintech sector involves its current market momentum. Recent data indicates that the industry should enjoy a compound annual growth rate (CAGR) of 26.2% between 2022 and 2030, making it perhaps the fastest growing sector within finance.
How much is the fintech industry expected to grow? ›
Fintech Market to Grow at CAGR of 12.31% through 2032 - Increasing Demand for Online Financing to Propel Growth. The fintech market size is anticipated to grow from USD 248.21 Billion in 2022 to USD 792.50 Billion in 10 years.
