Rohit Garg, Co-Founder & CEO, Smartcoin Financials

Rohit Garg is the Co-Founder and CEO at SmartCoin Financials, India’s first fully-automated next-gen Fintech company focused on providing financial access to the millions of innumerous self-employed micro-entrepreneurs, micro-merchants and middle/lower-income salaried individuals using alternative credit assessment aided by data science and machine learning. In his leadership capacity, he is responsible for overseeing the day-to-day management and executive processes at the company. He also spearheads the overall strategy and conceptualization, product design, business development, capital/resource management, and other crucial aspects for the firm.


India’s journey towards nationwide fintech adoption and financial inclusion is no walk in the park and contains its own set of obstacles. The major challenges faced by the fintech industry delivering its products and services in such areas are the lack of banking credentials and financial literacy amongst a major part of the population. Fintech companies exhibit a well-established operational framework that can help them expand their permeation scale by generating greater awareness about financial products and services. This is a critical aspect of increasing financial literacy in Tier-2 and Tier-3 cities. It not only assists finance companies to witness higher revenue levels but also accelerates India’s march towards financial inclusion and visible economic growth at a global stage.

The ensuing pandemic has fast-tracked the digital transformation, compelling the microfinance Industry to capitalize on the fintech boom. In wake of this rampant digitization, an in-depth reexamination of conventional processes is required. Novel waves of tech-powered fintech that are reliant on digital processes for fast-paced loan dispersal are witnessing a greater upsurge in financial operations. The rising cover of API solutions for user on-boarding through KYC authentication and instant loan disbursal is spearheading a fintech revolution for the extant underserved quarters of the country. While countless challenges impede the progress of the pan-Indian fintech movement, the collaboration of new-age financial startups and their traditional legacy equivalents are catalyzing a speedy deployment of advanced fintech solutions.

There are numerous factors that are obstructing the country’s mission towards financial inclusion and economic reliance. The most evident amongst them is the fact that a substantial segment of the Indian population does not enjoy access to basic banking and financial services. According to a report by the World Bank, over 190 million adults in our country are without an active bank account. Almost 20% of the masses are devoid of essential banking services from the very onset due to multiple factors. While 80% of our population has access to banking, only a negligible 5% can avail of unsecured credit services.

Even though a plethora of banking and financial players address the needs of the top and the bottom end of the country’s economic spectrum, it is the middle segment that lies bereft of financial services. This group mainly comprises self-employed micro-business owners, Blue, and Grey-collared workers, etc. who are hitherto deprived of general banking and finance on account of their income instability, lack of documentation, and absence of dependable credit history.

By addressing various hurdles that are typical to the underserved section such as major setup costs, inept manual processes, the earlier mentioned lack of credit history and a dearth of fintech innovation are preventing payment and banking companies from tapping into the magnanimous $100 billion market potential of micro-loans. But thanks to the rapid rise in finance technology, new-age payment companies and out-of-the-box financial players have the potential to tilt this situation over its head. By delivering specialized and fast-speed loans for short durations with almost zero paperwork and legal formalities, these entities are breaking pre-laid financial conventions and resolving a vast surfeit of underserved consumer requirements. Serving the underserved is one of the most central challenges that mark India’s quest for economic and financial inclusion.

The Indian hinterland as opposed to the government’s nationwide digital India campaign is particularly notorious for its heavy dependency on cash-based transactions. With about 20% of the rural and almost 65% of the urban Indian population having access to internet-based services, the need for greater digitization through diversification of essential infrastructure and digital awareness at a pan-India scale is penultimate.

As per a report released by KPMG, cashless digital transactions are witnessing a steady rise at an annual CAGR of 12.7%. The report further reveals that the number of merchants compliant with digital cashless payments has risen from 1.5 million in 2016-17 to over 10 million in about two years’ time. Similarly, nationwide fintech adoption and permeation have risen from 52% in 2017 to about 87% in 2019 as per the EY Global Fintech Adoption Index 2019.  Moreover, the adoption rate between the sexes slightly differed with about 88% of men utilizing fintech apps in contrast to 84% of female users. The highest consumer demographic that has adopted the digital fintech model belonged to the 25-44 age-group with 94% of them using it for their daily financial transactions and payment needs.

The biggest driver leading this large-scale fintech adoption is seamless money transfers and easy payments. About 94% swear by the fintech model owing to the streamlined transactions. This is followed by insurance at 76%, savings and investments at 67%, financial planning at 63%, and borrowings that account for about 61%.

The fintech industry has been further transformed with the advancement of hi-tech innovations such as Big Data, Artificial Intelligence and Machine Learning. By optimising these cutting-edge technologies in data sciences and machine language, fintech companies can collate enormous amounts of user-generated data. These alternate data reserves can be then used by the various payment companies for credit monitoring before authorising micro and small-ticket loans to the underserved population.

With such overarching growth in technology and infrastructure, tech-powered fintech players are witnessing stupendous growth across all quarters. Interestingly, about 60-70% of this growth has been attributed to tier 2/3/4 cities on account of greater internet connectivity and increasing digital awareness. This is one of the most crucial steps in India’s race towards financial literacy and an ‘Aatmanirbhar Bharat’.

As the journey towards financial inclusion at a pan-India scale speeds up with 80% of Indians gaining financial access, its multiplier effect can definitely rejuvenate the ailing economy. By accomplishing its various pre-laid sustainable development goals, India as a fast-developing economy can not only foster economic growth but also engage in the eradication of poverty amongst the underprivileged sections of our society. A vast surfeit of fintech corporations are driving the country’s campaign for an ‘Aatmanirbhar Bharat’ by focusing on uplifting the current levels of employment and productivity. They are doing so through digital technological innovation and financial engineering of personalised loan products that can effectively address the financial needs of an aspiring Bharat.

Financial inclusion doesn’t just mean people having access to a bank account. It can only be achieved when every citizen of this country has complete and unbridled access to inexpensive and hi-utility financial products and service suites with regard to their payments, transactions, and wealth management. The government can host various incentives and initiatives to empower the fintech industry. These range from regulating fintech activities with flexibility, augmenting awareness levels to further financial literacy using popular media pathways, and including financial literacy as full-fledged courses in the curriculum of academic institutions.

The rapid development in various aspects of financial technology is paving India’s road to financial inclusion and an ‘Aatmanirbhar   Bharat’. As fintech platforms are not deterred by traditional legacy processes and systems that are characteristic to other financial institutions such as banks and NBFCs, they can address the immense market potential more smoothly and easily. Having already established their diversified range of products and services in tier-1 cities, they are now gradually penetrating the rural as well as the remote regions.

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