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FinTech: India 2016

FinTech: India 2016

Fintech has exploded in India in the last two years—the sector is projected to grow at 22 %, with USD $1.25 billion invested in Indian fintech startups in 2015 alone. In parallel, the Government of India has prioritized financial inclusion through initiatives such as Aadhaar, small finance banks, payment banks, and pension, savings and bank account schemes for the unorganized workforce, children, and the unbanked. As a result, bank account penetration in India now stands at 53%, up from 35% in 2012. Yet almost 60% of these accounts show negligible or no transactions, and only 7 – 8% of small businesses in the country have access to credit, either institutional or non-institutional.  Significant gaps remain in the following:

  • Distribution of services to underserved demographics and areas;
  • Effective credit mechanisms and financial protection for SMBs and the agricultural sector;
  • Streamlined processes for government and private sector payments;
  • Social security and wealth creation mechanisms for low-wealth communities.

Village Capital, in collaboration with PayPal and BlackRock, and with local support from the DBS Foundation, hosted a 3-month business training program for early-stage fintech ventures from across India that are addressing these challenges. The program supported selected entrepreneurs through an award-winning program curriculum, 1:1 mentorship from sector leaders, and tailored engagement with potential strategic partners and investors. The program was 12 days of in-person work, taking place across three workshops spanning the course of three months.

At the end of the program, the top two ventures, as selected by their peers in the cohort, received an offer of US $50,000 in pre-committed capital investment from VilCap Investments.

PROGRAM OVERVIEW

Eligible Enterprises:

Village Capital looked for ventures with technology solutions to increase access and affordability of financial services for consumers and small businesses in India. Specific types of companies include, but are not limited to, those that:

  •  Offer innovative, appropriate lending products, both SME & consumer, especially for essential services like health, education & housing  (e.g.: peer-to-peer lending models, innovative SME financing, emergency loans, etc.);
  • Increase efficiency of distribution for provision of financial services across India, such as credit, payments, remittances etc. (“banking tech”, such as mobile wallets, money transfer tools, payments for micro-merchants);
  • Provide solutions for wealth creation & protection models for households and small businesses (e.g. savings, investment platforms, insurance tech, micro-insurance);
  • Leverage technology and data analytics for better credit scoring and customer segmentation for consumer and business lending;
  • Improve financial literacy and enable greater formalization and transparency of financial transactions;
  • Streamline the process for accessing government schemes in financial services and beyond. (e.g.: Aadhaar-based payments & remittances).

Furthermore, eligible enterprises all:

  • Had at least one full-time employee in India
  • Had meaningful customer or business validation (not limited to revenue, can also be successful pilot studies, number of users, and/or strategic partnerships)
  • Were interested in raising capital in the next 12 -18 months

 Program Dates:

  • Workshop 1: Nov 9 -12, 2016, Bangalore
  • Workshop 2*:  December 7– 10 2016, Mumbai
  • Workshop 3**: January 10 – 13, 2017, Mumbai

*Workshop 2 included a “Meet BlackRock” day on December 6th, 2016 at the BlackRock office in Gurgaon. This will involve dedicated interaction with the BlackRock team.

**Workshop 3 included a “Meet PayPal” day on January 9th, 2017 at the PayPal India Development Centre in Chennai.  This will involve dedicated interaction with the PayPal team,  with the opportunity to build close connections with relevant team members.

COMPANIES

PARTNERS

ADVISORY BOARD

Mridul Arora SAIF Partners
Amitabh Verma DBS Bank, India
Bindu Ananth IFMR Trust
Brian Cayce Gray Ghost Ventures
Deepak Sharma Kotak Mahindra Bank
Ganesh Rengaswamy Quona Capital
Guru Bhat PayPal
Kartik Desai Asha Impact
Mahesh Kanumury Arivali Partners
Sonia Soni BlackRock
Vikas Raj Accion Venture lab