The Ecosystem of FinTech Companies in India: A Futuristic Perspective

The paper examines the present fintech ecosystem in India in general and assesses the efficiency of fintech firms operating in lending and payment verticals. Twelve companies were randomly selected from the top-rated fintech companies in India having an operational track record of four years and more. Financial data of these firms for three years (from 2017-2020) was used for evaluating the efficiency by applying the DEA model. The results indicate that 42 percent of the companies were unable to achieve profitability. The interest obligation (36%) on short-term borrowings which constitute 68 percent of current liabilities is the major contributor to the operating cost of lending firms. Companies from payment verticals are less homogeneous in their component-wise distribution of operating cost. The current ratio of two DMUs is excessively higher while it is below the benchmark for the other six DMUs. To make the fintech a revenue generating model by scaling up their operation, this study suggests the business areas where fintech firms could collaborate with traditional financial institutions.