Reality:
There are over 1500 Fintechs in the country today operating in various fields of BFSI and in various geographies. Almost all these Fintechs are floated by promoters based in Delhi, Mumbai or Bangalore. There is huge imbalance here. About 75% of the investment is made in 10 Fintechs.

Fintech (companies engaged in the activity of Financial Transactions but only through the Technology platform), in spite of the hype associated with them, have penetrated to 23% of the top end population of India. Even banking sector represented by Private and Public sector banks have penetrated much deeper. These 23% represent people like you and I and mostly residing in large cities. While we keep talking endlessly about popular and visible Fintech such as PayTM in Mumbai and Bangalore but in Rudrapur and Giridih, not many have heard about it.

Reason:
The Fintech have catered so far, mostly to the English educated, Internet savvy and monied people. Their cost of educating the user or the beneficiary has remained low but as a result, their reach has also remained limited.

It requires innovation, optimum use of technology and conviction to reach out to the last person. Fintech were meant to do so but have miserably failed. Urban, Smartphone wielding, educated and affluent population has been a user of multiple Fintech products such as Policy Bazaar, Paisa Bazaar, MobiKwik, PayTM and many more. Hence, each of these players can boast of huge user base. But their rural and semi urban counterparts have no idea of any of these.

40% of the Indian population is not connected to the banks and 87% of the payments are made in cash. This segment is left outside of the power of the Fintech.

Effect:
It has resulted in some (not all) urban elite being spoilt for choice so far as Fintech convenience is concerned while a majority of urbanites and almost all of the rural / semi urban population being bereft of the facilities.

On one hand we have lending Fintech which lend at 18-24% per annum, on the other hand a farmer commits suicide because he could not pay Rs. 10,000 which was lent to him at a rate of 120%. Fintech can easily fill in this gap.

Opportunity:
The lower and the middle income sector which represents 47% of the country’s people has remained untouched by the so called Fintech miracle. Fintech have an opportunity to cater to lower and the middle income groups totalling roughly 60 cr in India. At least 35 cr out of this 60 cr have an immediate requirement to be approached by a Fintech for money transactions.

1. There is an opportunity for the Fintech to penetrate rural markets for channelizing and redistributing resources. The interest rates in the rural markets can be cut to 18-24% straightaway from 120-240% per annum.
2. There is an opportunity to lend 5-25 thousand each borrower.
3. There is an opportunity to address the actual beneficiary / borrower in his language. Hindi or regional.
4. There is an opportunity to go for very short term loans (15 days to 60 days).
5. There is a opportunity to take the banking to the doorstep of the actual user.
6. There is an opportunity to let the user determine the quantum of the loan, the tenor of the loan and the mode of the repayment (daily, weekly, monthly or the bullet repayment).
7. There is an opportunity to let the borrower understand first hand the actual cost of his loan.
8. There is an opportunity to send an audio file to the borrower for quantum, interest and repayment terms on the loans.
9. There is an opportunity that the borrower uploads an audio file requesting what all he wants, why and how will he repay.

And finally, there is an opportunity of tapping increasing mobile usage to 64% of the population from the current 53% by this year end itself.

Solution:
Any new Fintech that offers

Its content in the user friendly language and style
The easy operability of the site
All necessary content on the home page itself
Selection of loan amount, tenor, interest in the three clicks
Upload of the KYC documents without need to scroll down
Disbursement in 24 hours

Will turn out to be the first mover in the untapped geography.