Indian fintechs raised around $3.18 billion in equity funding in 2019-20 but the fundraising activity slowed after the spread of Covid-19 and the subsequent nationwide lockdown, shows the data compiled by the Reserve Bank of India. In April- June of FY21, Indian FinTechs have raised over $200 million.
The distribution of the funding of $3.18 billion raised during 2019-20 was highly skewed with the top 10 companies (by equity funding) accounting for approximately two-thirds of the total funding, the RBI said. Paytm raised around $1 billion in November 2019, which accounted for almost a third of the entire year’s fintech funding.
Also, most of the top fintech fundraisers operate in the payments arena.
According to the RBI, banks, which earlier viewed fintechs as disruptive forces, are looking at them as enablers in banking and finance. However, fintechs will confront several opportunities and challenges in the future.
The increasing popularity of Fintech's can exacerbate concerns relating to data privacy,use, and protection. Also, there is a need to ascertain the impact of fintech on financial stability, due to higher potential for system-wide risk with its expansion.