If 2018 dawned full of promise for fintechs, 2019 is all about uncertainty. Adjusting to a new reality. One where they can’t bank on the convenience offered by Aadhaar. One where they can no longer count on reams of data from Facebook and Google. And one where they can’t rely on a single source of capital for lending. Come 2019, fintechs will have to rethink their reliance on the underlying infrastructure they took for granted to do business.

What a marked change from 2018. Back then, WhatsApp was still to launch payments. Payments companies pinned their hopes on the impending updated version of the Unified Payments Interface (UPI) payments system, which was rumoured to have an automatic payments feature. This would allow users to instruct merchants to debit their bank accounts automatically at predetermined intervals, thereby helping payments companies scale further. With scale would come higher valuations.

Companies hoped the Reserve Bank of India (RBI) would stop viewing eKYC as merely a stop-gap way of doing KYC. The potential of eKYC led all kinds of companies to think of ‘lending as a feature’. If messaging app Hike had plans to lend, so did ride-hailing app Ola. All told, 64 lending companies received over $400 million in funding during 2018, according to data from startup database Tracxn.

But by the time the second half of 2018 arrived, things took a turn for the worse. UPI 2.0 arrived. Without automatic payments. Non-Banking Financial Companies (NBFCs) plunged into a liquidity crisis, casting doubt on whether they could, in turn, lend to fintechs. And then the Supreme Court delivered the straw that threatened to break the fintech camel’s back—the apex court’s verdict on Aadhaar banned private companies from using Aadhaar for KYC purposes.

These setbacks, along with what lies ahead—an election year, a change of guard at the RBI, the possibility of a global recession affecting access to foreign capital—makes 2019 a year when fintechs with flimsy business models will be found wanting. Starting with lending companies.

Distress call

Within the fintech ecosystem, lenders will probably have it roughest. Just when NBFCs were shaping up to be a valuable source of credit, the liquidity crisis struck. In September, infrastructure behemoth Infrastructure Leasing and Financial Services (IL&FS) defaulted on its loan obligations, spooking banks and mutual funds into halting lending to NBFCs. Fintechs, which are dependent on NBFCs, have also been impacted.

“We held back on long-term loans for a short period,” says Akshay Mehrotra, co-founder of instant loans company EarlySalary. “Luckily for us, just that weekend we got a series-B tranche [of $7million] and that will help tide us through this time.” However, Mehrotra understands that this respite is only temporary.

AUTHOR

Arundhati Ramanathan

Arundhati is Bengaluru-based. She is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She has spent over 10 years reporting and writing on various subjects. Previous stints were at Mint, Outlook Business and Reuters.

View Full Profile

Subscribe to read this story

The Ken is the only business subscription you need. Questions?

 

Premium

  • 5 original and reported longform business stories every week
  • Access to ONLY India edition
  • Close to 250 exclusive stories every year
  • Full access to over 5 years of paywalled stories
  • Pick up to 5 premium subscriber newsletters
  • 4 original and reported longform business stories each week
  • Access to ONLY Southeast Asia edition
  • Close to 200 exclusive stories every year
  • Full access to all paywalled stories since March 2020
  • Pick up to 5 premium subscriber newsletters

Rs. 2,750 /year

$ 120 /year

India Edition
Subscribe Subscribe
Most Asked For

Borderless

  • 8 original and reported longform business stories each week
  • Access to both India and Southeast Asia editions
  • Close to 400 exclusive stories every year
  • Full access to over 5 years of paywalled stories across India and Southeast Asia
  • Unlimited access to all premium subscriber newsletters
  • Visual Stories

Rs. 4,200 /year

Subscribe
 

Echelon

  • 8 original and reported longform business stories each week
  • Access to both India and Southeast Asia editions
  • Close to 400 exclusive stories every year
  • Full access to over 5 years of paywalled stories across India and Southeast Asia
  • Unlimited access to all premium subscriber newsletters
  • Visual Stories
  • Bonus annual gift subscription
  • Priority access to all new products and features

Rs. 8,474 /year

Subscribe
Or

Questions?

What kind of subscription plans do you offer?

We have three types of subscriptions
- Premium which gives you access to either the India or the Southeast Asia edition.
- Borderless which gives you complete access to The Ken across both editions
- Echelon which gives you complete access to The Ken across both editions along with a bonus gift subscription

What do I get if I subscribe?

The Premium edition gives you access to stories in that edition along with any five subscriber-only newsletters of your choice.

The Borderless and Echelon subscription gives you complete access to The Ken across editions and unlimited access to as many newsletters as you like.

What topics do you usually write about?

We publish sharp, original and reported stories on technology, business and healthcare. Our stories are forward-looking, analytical and directional — supported by data, visualisations and infographics. We use language and narrative that is accessible to even lay readers. And we optimise for quality over quantity, every single time.

Our specialised subscriber-only newsletters are written by our expert, award-winning journalists and cover a range of topics across finance, retail, clean energy, cryptocurrency, ed-tech and many more.

How many newsletters do you have?

We are constantly adding specialised subscriber-only newsletters all the time. All of these are written by our team of award-winning journalists on a specialised topic.

You can see the list of newsletters that we publish over here.

Does a Premium subscription to your Indian edition get me access to the Southeast Asia edition? Or vice-versa?

Afraid not. Each edition is separate with its own subscription plan. The India edition publishes stories focused on India. The Southeast Asia edition is focused on Southeast Asia. We may occasionally cross-publish stories from one edition to the other.

We recommend the Borderless or the Echelon Plan which will give you access to stories across both editions.

Do you have a mobile app?

Yes! We have a top-rated mobile app on both iOS and Android which allows you to read on-the-go and has some amazing features like the ability to bookmark stories, save on your device, dark mode, and much more. It’s really the best way to read The Ken.

Is there a free trial?

You can sign up for a free account to experience The Ken and understand our products better. We’ll send you some free stories and newsletters occasionally, and you can access our archive of previously published free stories. You can stay on the free account as long as you’d like.

The vast majority of our stories, articles and newsletters can be accessed only by a paid subscription.

Do you offer any discounts?

Sorry, no. Our journalism is funded completely by our subscribers. We believe that quality journalism comes at a price, and readers trust and pay us so that we can remain independent.

Do you offer refunds?

No. We allow you to sample our journalism for free before signing up, and after you do, we stand by its quality. But we do not offer refunds.

I am facing some trouble purchasing a subscription. What can I do?

Just write to us at [email protected] with details. We’ll help you out.

I have a few more questions. How can I reach out to you?

Sure. Just email us at [email protected] or follow us on Twitter.