Budget 2024: What Fintech Firms are Expecting from the Budget

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The Fintech sector in India has come a long way, with several products and solutions gaining wide-spread acceptance across the board. The past year, especially, proved to be an eventful one for the Fintech industry, marked by technological advancements, significant growth, and new regulatory changes, coupled with strong unexpected headwinds in the form of funding winters and large addressable markets. Now, as we lay our eyes on the union budget 2024, there is a wave of optimism amongst players in the Fintech space.

While the industry has been subject to complex and evolving regulatory changes, there is a heightened anticipation that the upcoming budget will employ measures that will furthermore foster innovation and financial inclusion across the country. This sentiment is backed by the government’s proactive practices to introduce initiatives and policies that improve access to financial services and create a safe, conducive regulatory environment.

The Reserve Bank of India’s pilot project in the form of a Public Tech Platform is one such outcome that is expected to facilitate ‘frictionless’ and ‘timely’ credit access for micro, small, and medium enterprises (MSMEs). This will not only expedite and simplify the lending process but also strike an effortless link between lenders and borrowers, making it more viable for borrowers to secure financing.

The industry also expects increased collaboration between traditional banks and Fintechs to develop new innovations, products, and business models, and defy the challenges through effective partnerships. Where banks can contribute by giving access to an extensive customer-base and providing capital, Fintechs can facilitate technological support and instantly-acquirable solutions; thereby pushing out hybrid models and combining the strengths of both worlds.

In the realm of taxation, companies are hoping for provisions in the budget that enable increased tax reliefs for startups and supportive policies that drive innovation and product development among smaller players. Offering access to funding programs, accelerator programs, and incubators targeted to boost the growth of the Fintech ecosystem are efficient solutions in this context.

The Fintech sector is also looking towards the interim budget as a way to gain support for moving beyond Tier-II regions, to smaller cities and towns in India, with a focus on promoting women-led enterprises countrywide. There are hopes of favourable initiatives for women and young professionals around areas like artificial intelligence, machine learning, data analytics, and the world of digital as a whole with a larger goal to bolster financial inclusion and sectoral progress.

The upcoming budget presents an excellent opportunity for both the government and players in the financial services industry to bring about a wave of change and drive sustainable growth in the industry. Empowering underprivileged SMEs through technical and financial support, tapping into grassroots level, and empowering young entrepreneurs who are looking to find a footing in the industry would be a much-welcomed move and a strategic push towards inclusive growth!

The author is Chief Operating Officer (COO), Tech Fini. Views are personal.