India's Fintech Sector: A Rising Star in Global Markets

India's fintech market is rapidly evolving, driven by a combination of digital infrastructure and a mobile-first population. A recent report highlights a significant growth in digital lending and emphasizes the country's potential for future investments. With a growing middle class and increasing demand for credit, India is becoming a focal point for global investors. Experts suggest that fintech companies must innovate while maintaining trust and profitability to succeed in this dynamic landscape. As the global fintech sector also experiences substantial growth, India is well-positioned to be a key player in the coming decade.

By Narendra Chaudhary Jun 2, 2025, 14:48 IST

India's Fintech Landscape

New Delhi, June 2: India has positioned itself as a leading player in the global fintech arena, fueled by a robust mix of digital public infrastructure such as UPI, Aadhaar, and Account Aggregator, along with a mobile-centric population and clear regulatory frameworks, according to a recent report.

The report from QED Investors and Boston Consulting Group (BCG) indicates that fintech-driven digital lending experienced a remarkable growth rate of 35% CAGR in 2024, spurred by increasing demand for credit.

Innovative tools like UPI have sparked a wave of fintech advancements, enhancing services from digital lending to payments and wealth management, particularly benefiting those who are underserved or unbanked. This progress has significantly boosted financial inclusion and innovation, making India an attractive destination for both international investors and local fintech companies.

India is recognized as one of the top regions for future fintech investments. The report encourages investors to allocate resources to high-growth markets like India, focusing on the integration of AI and sustainable scaling.

Currently, India's affluent middle class constitutes 31% of the population, with projections suggesting it will rise to 40% (approximately 600 million) by 2031. This demographic evolution is driving a notable increase in consumer credit demand across retail, consumption, and small to medium enterprises.

"India is at a pivotal moment in the global fintech scene. With a solid digital infrastructure foundation, including UPI, Aadhaar, and Account Aggregator, alongside a tech-savvy, mobile-first populace, the nation has demonstrated how innovation can facilitate widespread financial inclusion," stated Sandeep Patil, Partner and Head of Asia at QED Investors.

To thrive in the next phase, fintech companies must combine innovation with strategic execution.

"This entails establishing trust, proving profitability, and adeptly navigating a changing regulatory environment. The Indian market is vast, dynamic, and underutilized, making it a prime candidate for becoming a key player in the global fintech landscape over the next decade," Patil added.

On a global scale, fintech revenues surged by 21% in 2024, a significant increase from 13% in 2023, indicating a threefold acceleration compared to the broader financial services sector.

"A new generation of established fintechs is emerging. Investors are seeking greater maturity, while regulators are demanding increased accountability," remarked Deepak Goyal, a managing director and senior partner at BCG.

"At the same time, new disruptors are leveraging next-gen technologies like agentic AI and developing innovative business models, compelling established firms to keep innovating," he concluded.