India overtook China to be Asia’s top fundraising hub for financial technology in Q1, 2019.
India and China had 29 fintech deals in Q1, 2019.
China’s fintech deals reduced from 76 deals to 29 fintech deals in Q1, 2019
Funding for fintech startups is gaining immense acceleration in India since the initiation of 2019. On looking at a new report from data provider CB Insights shows funding for fintech startups in China dropped 87.6 percent year-over-year to $192.1 million during the first quarter of 2019 India, which recorded $285.6 million raised for fintech startups in the period, overtook China to be Asia’s top fundraising hub for financial technology. Since 2018 China used to lead in the race of finding for fintech startups in Asia.
According to the reports both countries had 29 fintech deals, suggesting a cooling investor sentiment in China which saw its height of 76 deals just three quarters ago. In the past few years, China has rolled out a burst of measures to rein in financial risks generating from its abecedarian online lending industry. Peer-to-peer lending, which matches individual questing for a loan with someone in wish to invest, has been the top target in a wave of government crackdowns. This sort of service offers credit to unbanked individuals who cannot otherwise get loans in a country without a mature unified credit system. But a lack of oversight led to intemperate frauds across the board. Thousands of peer-to-peer lending sites shut down due to enhanced regulation, which is estimated to leave as few as 300 players on the market by the end of 2019, Shanghai-based research firm Yingcai forecasted.
Same as China, India’s passion for finance technology is in part a result of the country’s lack of financial infrastructure. Lending startups are collecting steam as they, like their Chinese counterparts, tailor services to the country’s large unbanked and underbanked consumers and enterprises. Moves from tech leaders are also set to send ripples through the rest of the industry. Amazon finally followed its rivals Google Pay l, Paytm and PhonePe to commence offering peer-to-peer payments in the country. Walmart is closely watching how Flipkart, which it bought out last year, applies data to payments solution.
CB Insights report also notes that despite the setback in online lending, a new form of consumer-facing financing vehicle — so-called mutual aid platforms that let patient’s crowd fund for important diseases are enjoying an early boom in China. As with peer-to-peer lending, internet-powered mutual aid is giving it’s best to fill gaps in a traditional industry. Though most Chinese folks are part of a national public insurance scheme, surgical bills can easily bring down an average family.
India is working efficiently to gain more funds for fintech startups and give tough competition to its rival China in upcoming quarters of 2019.
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