The Fintech Revolution in India Vs Bharat

Authored by Santosh R, Co-Founder & CMO, Elever.

Over the last decade, fintech in India has gone from being a buzzword to a genuine force reshaping the financial landscape. From mobile payments and peer-to-peer lending, from insure-tech to robo-advisory, fintech has revolutionized lives, creating a digital financial ecosystem that has made financial services more accessible, efficient, and affordable.

In urban India, or “India”, fintech has become synonymous with convenience. Retail digital payments have increased significantly over the past five years, growing from $300 billion in 2018 to $3.6 trillion in 2024. The Reserve Bank of India (RBI) Digital Payments Index (RBI-DPI) also reflects this growth, rising from 395.57 in March 2023 to 445.5 in March 2024. This shift has not only transformed consumer behaviour, but has also provided businesses with a broader customer base and streamlined operations. For instance, the adoption of Unified Payments Interface (UPI) has made it easier for small businesses to accept payments, reducing their dependency on cash and fostering a more inclusive financial environment.

The fintech sector’s rapid evolution is further fuelled by ongoing innovations and government policies. The introduction of the UPI, Aadhaar-enabled payment systems, and the India Stack has created a robust infrastructure that supports the seamless delivery of financial services. Initiatives like Pradhan Mantri Jan Dhan Yojana (PMJDY) have further amplified financial inclusion by opening bank accounts for over 450 million unbanked.

However, when we step outside the urban bubble and look at semi-rural and rural India, or “Bharat”, the picture is different. There’s no denying that the lives of people and businesses in these areas have improved significantly over the past 20 years. The proliferation of mobile phones and the internet has brought financial services closer to rural households, with nearly 70% of rural adults now having access to formal financial services (Source: World Bank, 2023). Yet, the gaps in the fintech revolution between India and Bharat are glaring. Many rural regions still lack the necessary infrastructure and digital literacy to fully embrace fintech solutions. For example, while UPI transactions are commonplace in cities, cash remains king in rural markets, with over 80% of transactions still conducted in cash (Source: NITI Aayog, 2023).

One of the most pressing needs is to empower rural India to manage and grow their money effectively. Financial literacy remains a significant challenge, with only 24% of rural adults in India being financially literate (Source: SEBI, 2022). This lack of awareness often leads to the misconception that financial management and growth services are only relevant for the affluent.

However, integrating fintech into rural life could be transformative. For example, mobile banking and digital wallets can provide rural households with secure and convenient ways to save money, make payments, and access credit. Micro-investment platforms could enable small farmers and entrepreneurs to invest their surplus income in a diversified portfolio, helping them grow their wealth and secure their futures. Additionally, insure-tech solutions could offer affordable insurance products tailored to the needs of rural communities, protecting them against unforeseen risks.

The benefits of these services are not just theoretical. A study by the International Finance Corporation (IFC) in 2022 found that rural households with access to digital financial services were 25% more likely to save money and 50% more likely to invest in income-generating activities compared to those without such access. This highlights the potential for fintech to uplift rural economies and narrow the gap between India and Bharat.

As we look ahead, the challenge lies in ensuring that these innovations reach the hinterlands of India. The government, fintech companies, and civil society must collaborate to enhance digital infrastructure, improve financial literacy, and design products that cater to the unique needs of rural populations. With these efforts, we can be optimistic that the existing gaps will gradually close, and the fintech revolution will uplift the entire nation, not just urban India. The journey from India to Bharat may be long, but the wheels of change are undoubtedly in motion.