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Booming times for fintech companies in India, China


03/11/2016

With a burgeoning consumer base, fintech companies in India and China are seeing phenomenal growth.



As per data from KPMG and CB Insights, traders have invested a record $4.5 billion into financial start-ups in Asia last year. This is four times than the amount in the previous year putting the region at the centre of the global tech revolution.
 
As per the data, total investments into peer-to-peer lenders, Internet insurers and payment services companies have surged by 60% to $19.1 billion.
 
Led by giant funding rounds for fintech companies in India and China, investments have risen sharply. With the region having a couple of billion consumers who use their mobile phones for paying just about everything under the sun, it appears that the trend is likely to continue.
 
As per the data, the amount investment in China is nearly three times the investment levels Britain has seen in 2014-2015.
 
"Naturally, because growth in the region is quite high, you should expect to see continued investment," said Zennon Kapron, founder of Shanghai-based financial industry research firm Kapronasia.
 
Significantly, India and China with their booming populations have a high adoption rate of new technologies which creates a fertile ground for industries such as credit card operators, banking and insurance companies.
 
Case in point, in India wherein two-fifths of the 1.27 billion population have no bank account and with only 252 million having access to the internet, the prospects for growth is phenomenal for financial companies looking to leverage mobile technology to connect its services to clients.
 
"The rising number of people getting used to smartphones and new technologies in India will result in more funds flowing into the fintech solutions providers in the near-term at least," said Harish HV, an India-based partner at advisory firm Grant Thornton.
 
The situation is similar in China. Thanks to the purchasing power of its burgeoning middle class, Lufax, an online lending platform, Zhong, an online property platform, and Casualty Insurance now rank in the top 5 fintech companies in the world, by valuation.
 
Earlier in January this year, Lufax closed in on a $1.2 billion funding round. Ant Financial Services Group, the financial arm of Alibaba Group Holding Ltd, is also set to raise $3 billion this year.
 
One97, India’s mobile payment services company, has become the sixth largest among the fintech giants, which only goes to underscore the potential value that investors place in the region.
 
"There's a lot of interest in this segment," said Harish.