New Delhi: India’s fintech industry has raised a cumulative funding of $27.6 billion and is expected to be valued at over $150 billion by 2025, Amitabh Kant, CEO, NITI Aayog said at Razorpay’s FTX 2021 event.

He also noted that there are over 2,100 fintech companies in the country with more than 67 percent of them set up in the last five years. “The industry has seen tremendous growth in the past couple of years, establishing itself as a vibrant fintech hub on the global stage,” Kant said.

He noted that India’s fintech ecosystem has reached here because of a systematic approach, with the government playing a key role as a facilitator. He tracked the growth story of the fintech ecosystem to India’s larger Digital India initiative and the development of UPI and India Stack.

“The first requirement that had to be addressed was that of a digital identity system, with a built-in authentication mechanism. With the development of the Aadhaar stack or India stack, we built the first building block of the fintech ecosystem. After taking the first challenge, the emphasis shifted to the digital infrastructure layer for peer-to-peer transfer of money. This took the shape of the unified payment interface (UPI), and the National Payments Corporation of India (NPCI) was established to oversee its functions. Through UPI, we have created one of the largest growing digital payments platforms in the world,” said Kant.

The NITI Aayog CEO also noted that India has a clear shot at cementing its position in the global landscape with the responsive policies in India’s dynamic entrepreneurial ecosystem. “Through our regulatory sandboxes, agile and responsive approach to policies, we are not only creating space for innovation, but we are also exploring newer ways to solve old problems in partnership with start-ups in the private sector,” he said.

In November, 4.18 billion transactions were processed through the UPI.

A collaborative approach to UPI allowed the private sector to build apps on top of the underlined digital infrastructure to enable payment services. This has allowed the whole ecosystem of payment start-ups to flourish. With payments problems solved, the fintech ecosystem would shift focus towards lending where there has been emphasis towards both consumers as well as MSMEs-based lending, he said.