These allow the former – the banks – to provide their customers with convenient, innovative services within a short space of time. The latter – the fintech businesses – get to tap into a large customer base and benefit from the confidence shown in them and from regulatory expertise, amongst other things.
The sector attracted funding from all categories of banks in the boom period 2003-08. As many leading manufacturers in the automobile and other sectors started sourcing their inputs and supplies from the small enterprises, banks and NBFCs found that lending to such small enterprises was good business.