Budget '18: FinTech players await further push to digitization

With this year's Union Budget scheduled to be presented in two days, anticipations are rife on what the government has in store for various sectors, especially post the rollout of the Goods and Services Tax (GST).

The FinTech sector is one that has gained momentum significantly in the recent past, as they are facilitating easy loan disbursal across sectors.

Here are some of the pre-budget expectations from the sector:

Indifi Technologies

"We hope that the budget will announce concrete measures for continued push and incentive for digital payments. Expanding the coverage of Mudraa and other credit guarantee schemes to cover new age business models and FinTech platforms will help the sector to get more access to credit and digital existence. Secured API access to customer information using GST system and simplification around GST will be an additional benefit," said Alok Mittal, co-founder, Indifi Technologies.

CreditMantri

"As a fintech service which has data and technology in its core, the GST did not impact us directly; but this unified tax with and the recent systemic changes would bring about a much-needed digital push and increased accountability. We hope in the year ahead that the Digital India initiatives along with the GST which functions entirely online would bring about a shift in mindset and increased digital adoption," Ranjit Punja, CEO and co-founder, Creditmantri.com

Loantap

"Start-ups are doing a great service to the Nation. Beside job creation, FDI and innovation, they are bringing a consumer-centric approach to business. This is pushing well entrenched old-world companies to look after customers as individuals with varying needs, unlike a production belt approach which they presently have towards the customers. The startup ecosystem needs a soft-hand approach from government and regulators. The authorities also need to differentiate based on good and bad intentions of startups," said Satyam Kumar, co-founder and CEO, Loantap.in.

Aye Finance

"One of the primary suggestions would be that the government should continue its firm stand on not allowing unnecessary loan freebies to the Agro or MSME sector. Passing on such freebies destroys the credit discipline and rewards the offenders, and thus indirectly punishes the diligent loan re-payers. Further, the regulatory rules governing the FinTech businesses need to be finalised on priority. The focus of the regulators should be to enlarge the reach of organised lending, especially in bringing the excluded parts of the economy into the fold of organised lending. FinTechs are, and will, play an important part in achieving this objective," said Sanjay Sharma- MD and CEO, Aye Finance.

pCloudy

"At this stage when the startup ecosystem has matured enough, more impetus should be given on increasing the tax incentives and faster procedure clearances. We are also expecting a few tax holiday periods to increase from three to seven years. Considering the slump in valuations in subsequent rounds of funding by the start-ups, we look forward to the government providing necessary clarity for invoking anti abuse provisions on taxation of issue of shares at higher than FMV. Also, if the TDS rate deductions by the customers of startups can be reduced to one to two percent in the initial three to five years of the business cycle of startups, this will give a big boost to startup ecosystem," said Avinash Tiwari, co-founder and Director, pCloudy.

On a related note, the Union Budget 2017-18 will be presented by Finance Minister Arun Jaitley on Thursday.