Budget 2024: What fintech, digital lending companies are expecting this time. Top points

India's fintech sector, a pivotal component of the nation's economic structure, is poised to substantially impact by contributing an estimated additional $400 billion to the national economy over the upcoming seven years. Renowned globally for its fintech advancements, India's fintech industry has played a significant role in extending financial services to previously underserved populations.

Historically, budget allocations have prioritised the enhancement of key sectors such as agriculture and Micro, Small, and Medium Enterprises (MSMEs). 

Fintech companies have been urging the government to prioritise schemes and incentives that promote their expansion to underserved Micro, Small, and Medium Enterprises (MSMEs), as noted by industry stakeholders. Fintechs are also anticipating government support in fostering collaborations with conventional institutions and fostering inventive solutions, all while maintaining financial stability.

During the latest interim budget, fintech firms had appealed to Finance Minister Nirmala Sitharaman to advocate for financial inclusion among MSMEs, simplify lending procedures, introduce incentives for financial inclusion, and implement tax benefits to accelerate the growth of the sector.

Here are the key expectations in the full Budget 2024-25:

1. Bipin Preet Singh, Co-founder and CEO at MobiKwik

“The Government of India, regulators, and fintech firms can unlock India's digital financial revolution through a conducive regulatory framework, enhanced public-private partnerships, and advanced technologies like AI and blockchain. The Union Budget 2024-25 can support this growth with clearer regulations, tax exemptions, and lower capital costs, boosting profitability. A lot needs to be done to bring the underbanked into the financial mainstream, especially in Tier 2 and 3 cities and beyond, where the penetration of fintech products and solutions remains low. We expect the upcoming budget to unlock new opportunities, enabling access to financial products through partnerships between large public sector banks and fintechs.”

2. Dilip Modi, Founder & CEO of Spice Money

“As we approach the Union Budget 2024, there is strong anticipation within the financial services sector for measures that will significantly enhance financial inclusion and economic growth. A key focus must be on investing in digital public infrastructure, which is essential for driving India towards its $5 trillion economy goal. Digital public infrastructure has been instrumental in driving the exponential growth of digital payments in India, with an approximately 90-fold increase over the past 12 years, highlighting the nation’s digital transformation. This remarkable surge underscores the need for robust security measures to prevent digital payment fraud. We commend the recent initiatives to enhance security, such as the announcement of a digital intelligence platform. It is essential to continue focusing on enhancing security and safety measures to support sustained growth and consumer confidence in digital payments."

3. Anand Kumar Bajaj, Founder, MD & CEO, PayNearby

“As we anticipate the Union Budget, the focus on Bharat, India's rural heartland, takes centre stage. The journey towards a $5 trillion economy hinges on the transformation of these rural areas, driven by groundbreaking financial and digital solutions provided by leading fintech players. However, for these services to reach citizens at the last mile, technology, security, trust, and Government support are crucial. Tax benefits on total expenditure for fintechs involved in the financial empowerment mission. In light of this, we propose specific measures, including a special 5% GST rate for startups working for last-mile empowerment, facilitating crucial financial and digital services to the citizens. A GST subsidy, even a modest one, would significantly ease the reach of financial services and government benefits, encouraging innovation in the financial empowerment space."

4. Raj P Narayanam, Founder and Executive Chairman, Zaggle Prepaid Ocean Services Limited

"Digital Banks in India have the potential to bridge the gap between traditional banks and FinTechs by offering a blend of innovative financial products, a seamless user experience, and the regulatory backing of a licensed bank. Addressing the potential challenges through a well-defined regulatory framework and a phased approach can pave the way for a more inclusive and dynamic financial ecosystem in India. It can also serve as a strategic mid-gap arrangement between traditional banks and fintech companies, addressing the evolving needs of digital-savvy consumers and fostering financial inclusion empowering consumers with secure, convenient, and affordable banking services tailored to the digital era's demands."

5. Rashmi Saluja, Executive chairperson, Religare Enterprises

"As we step into the Modi 3.0 era, expectations run high for groundbreaking reforms in the fintech sector. The upcoming budget is anticipated to fuel innovation, foster financial inclusion, and bolster India's position as a global fintech powerhouse. We foresee targeted incentives for startups, streamlined regulatory frameworks, and enhanced digital infrastructure. This will attract international investments and democratize financial services, empowering millions across urban and rural landscapes. The government's commitment to a digital-first economy should translate into policies that encourage the adoption of cutting-edge technologies like blockchain, AI, and cybersecurity."