Fintech community embraces FM’s measures, expects wise usage of Rs 1,500 crore funds

Among the measures announced on Friday under the Union Budget 2021-22, the industry also had something to cheer about. Finance Minister Nirmala Sitharaman mentioned that the Government would support the development of a world class Fintech hub at the GIFT-IFSC (Gujarat International Finance Tec-City, India’s first International Financial Services Centre).

The minister also highlighted a significant increase in digital payments in the last couple of years “There has been a manifold increase in digital payments in the recent past. To give a further boost to digital transactions, I earmark Rs 1,500 crore for a proposed scheme that will provide financial incentive to promote digital modes of payment,” she said.

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The fintech community in India has received the announcements with a welcoming attitude.

Kumar Abhishek, CEO & Founder, ToneTag, believes the move to promote digital payments will uplift and establish infrastructure throughout the country, especially in Tier 2 and Tier 3 cities and fintech companies will have better access to different locations and adequate incentives for growth.

“Also, the support extended by the government to GIFT city is a crucial development for the Fintech ecosystem, especially startups. The availability of customised support and tools will not only expedite the processes and development but also create an environment conducive to ideas and innovations,” he said.

Similarly, Seshadri Kulkarni, CEO, DigitSecure, agrees that the fintech hub will help facilitate interaction and collaborative learning between regulators, innovators, investors, startups and established players.

“The government’s facilitation in setting up ‘world class’ fintech hub will help bring together new technologies such as big data, AI and blockchain to transform the way that financial services are delivered, making them cheaper, more efficient, more convenient and more inclusive,” he said.

Alok Mittal, CEO and Founder, Indifi Technologies, which provides online business loans to small businesses said that the fintech hub is a tremendous opportunity to provide seamless linkage for Indian fintech companies to global financial ecosystems. He also strongly advocated that MSMEs have borne the brunt of Covid-linked disruptions, and more may have to be done outside of the budget announcements to revive the sector.

Harshil Mathur, CEO & Co-founder of Razorpay, one of the leading fintechs in digital payments have many expectations from the Rs 1,500 crore allocated to promote digital payments. “2020 saw an 80% increase in digital payments, especially from Tier 2 & 3 cities. I believe the Rs 1,500 crore incentive announced will be used towards developing alternatives to Zero MDR policy and initiatives towards bringing digital financial literacy in vernacular languages. These will instil trust in the system and accelerate adoption from MSMEs and entrepreneurs who are apprehensive towards moving money digitally,” he said.

On the fintech hub, he said that it would be ideal to have more such hubs across India to foster inclusive growth for the MSME sector. “Such hubs can be modelled on the lines of SEZs, encouraging multiple players in the ecosystem to collaborate and build better payment infrastructure and hyperlocal solutions to meet changing customer and business demands,” he said.

In the meantime, some players are finding it early to comment on the initiative and expected more from the Budget for financial inclusion. Akash Gehani, co-founder and COO of Instamojo is looking forward towards how the government is going to use the funds.

“The announcements made by the Finance Minister towards the further development of digital payments in India, as part of the Union Budget 2021 are indeed positive. In fact, the allocation of Rs.1500 crore for digital payments is a welcome move, but it is too early to comment on the same. What we should be looking forward to is the implementation of the same. While the funds have been announced it is still unclear how this budget allocation is going to be used for the benefit,” he said.

Kunal Shah, co-founder and CEO, CRED, said that along with the provisions mentioned there is a need for sustained measures that help increase digital and financial literacy, enabling more individuals to benefit from solutions made available to them.

“Incentivizing the use of credit and educating Indians about the responsible use of credit through financial education will help promote consumption, contributing to economic growth, which is dependent on personal consumption,” he said.

Fintech community embraces FM’s measures, expects wise usage of Rs 1,500 crore funds Fintech community embraces FM’s measures, expects wise usage of Rs 1,500 crore funds Reviewed by TechCO on 2/06/2021 Rating: 5

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