Though IT trade body Nasscom claimed that India has more startups than China last week, the KPMG Fintech100 report for 2016 does not reflect it. In the top 100 fintech companies shortlisted from across countries, there are only three Indian startups that have made the cut, while China dominates the list with four among the top five and eight in the top 50.

Though fintech is an emerging sector in the Indian startup ecosystem with more than 70 startups coming up in the space this year across payments and lending verticals, they are yet to achieve scale and maturity .

“There are many emerging countries in Asia and Africa which are stepping up their fintech efforts and activities. In the case of India, there have been constraints like lack of technological readiness, open APIs, regulatory support and limited government incentives that are coming in the way of fintech companies scaling up and receiving the large scale investments that would convert them into fintech unicorns,” said Neha Punater, head of digital strategy , innovation and fin tech at KPMG India.

“Moreover, Indian fintech companies are currently focusing on the local market alone and not tapping the developed markets which would allow them to gain visibility both in terms of customers and investments, which would catapult them in the league of more established fintech companies out of Silicon Valley, UK and Israel,” Punater said.

“The real p otential of fintech is in scale. The technology, data points and marketplaces are trying to deliver. If you look at China and the US, the volumes are staggering. In comparison, India is still small, and the acti vity has picked up only in the last three years,” said Sashank Rishyasringa, Co-Founder of Capital Float, one of the most-funded start-ups in the lending space in India.

“We are starting to hit the inflection point in the learning curve and with that we will be able to scale.”

For Harshvardhan Lunia, Co-Founder of LendingKart, one of the three Indian startups to have made the list in the top 100 fintech companies listed in the report, infrastructural challenges at an early growth stage have hindered its global appeal

“Some of the basic bottlenecks for Indian fintech players include accessibility of hardware, absence of fintech services in vernacular languages and low internet penetration in India.However, smartphone penetration offers unbridled opportunities. Most of the developed nations have these series of set-up built over decades. Therefore, it will take a bit of time for the required infrastructure to build in India,” said Lunia.

Since India is considered to have 21% of the world’s unbanked population, the nascent fintech industry in India is expected to grow bigger. Sanjay Swamy, managing partner at Prime Venture Partners and an investor in several fintech players believes the opportunities for Indian fintech bigwigs are vast.

“India presents a unique once-in-a-lifetime opportunity with platforms based on Aadhaar, eKYC, eSign & UPI. It’s early days -these platforms combined with 4G, smartphone penetration and IndiaStack getting used widely will result in several monster Indian fintech companies emerging and appearing in future lists,” said Swamy.

Source: The Economic Times