Budget 2024 expectations: MobiKwik CEO Bipin Preet Singh seeks green finance benefits for fintech, exclusive licences
Budget 2024 expectations: In an exclusive conversation with Mint, MobiKwik CEO and Co-founder Bipin Preet Singh pitches for green finance benefits for fintech sector, AI investments to boost penetration, and exclusive licences and rights.
Budget 2024 expectations: Ahead of the upcoming interim budget for the fiscal year 2024-25, Bipin Preet Singh, Co-founder and CEO of One MobiKwik Systems Limited, laid out his asks, including investments focused on synergy of AI with fintech, exclusive licences, green finance and more, while speaking with Livemint in an exclusive interview.
MobiKwik made headlines after it filed a draft red herring prospectus (DRHP) with the capital market regulator, the Securities and Exchange Board of India (SEBI), for an initial public offering (IPO) for the second time earlier this month.
Edited Excerpts:
Q: How do you see the budget helping fintechs form a symbiotic relationship with AI?
A: Currently, English is the only language that all fintech is using, and India is a diverse country. So, due to the language barrier, many people still don’t have access to the ease of fintechs. I call for the government to come up with standardised interfaces for fintech apps made using AI that can help remove the language barrier using language models. I’m looking for investment from the government in the budget for AI that is focused on eliminating language and behavioural barriers. We need a national-level kind of mission for this, just like we did in payments with the National Payments Corporation of India (NPCI). Since this technology doesn’t exist on a large scale in India, everybody is importing talent and technology. It would be great if this could be developed at a national level.
Q: How is MobiKwik leveraging AI?
A: In terms of AI, we are in the very nascent stage or early stage of leveraging AI. MobiKwik is used by around 146 million people and over 3.5 million merchants. We have a lot of data to make sense of. We also have a product like MobiKwik Lens, which is linked to an account aggregator and gets all the banking data of all the customers that we have. This data, however, has to make sense for the customers. So, one of the uses of AI is to convert this data into a more usable format in terms of educating the customer so they understand what they are doing with their money and what’s happening with the money in their bank account. Additionally, AI can be used in customer support, digital collections, and also in credit risk underwriting.
Q: What policy changes do you seek from the upcoming budget that can help fintech?
A: I expect the budget will simplify several rules and regulations related to financial services and allow fintechs to do more things than banks. For example, fintechs are not allowed to issue credit cards or offer deposit products. One of the things I’m looking forward to from the budget is how it can set aside new rules and regulations for the development of the fintech ecosystem by allowing them to do new things. The government can bring new forms of licences exclusive to fintech that can allow players like MobiKwik to bring more products at lower prices for consumers.
Q: The total expenditure on security printing from 2022 to 2023 was ₹4,682.80 crore. The RBI also disposed of 4,824 lakh pieces of soiled ₹2,000 notes in the same period. Does fintech have any role in India’s green finance economy?
A: Green finance is an area where projects are financed, keeping in mind the positive or lower impact on the environment. Digital finance, payments and fintech can also be classified as green finance. The digital economy, including fintech, is contributing to an environment where people don’t have to physically visit banks for cash deposits. So, the benefits of green finance should be passed on to fintech and other digital finance sectors.
With RBI tightening the regulation on lending norms, how is MobiKwik navigating the challenges faced in the lending business? As RBI Governor Shaktikanta Das recently said, the Indian fintech industry is projected to generate around $200 billion in revenue by the year 2030. How do you see the new norms impacting the growth projection?
A: I think the whole world of financial services goes through this tightening and loosening at all times, which includes interest rates, credit risk, type of loans, etc. I think what the RBI has seen is that in the last couple of years, post-COVID, banks, along with fintech, have also recovered. Banks have issued a lot of credit cards, and retail lending has actually grown significantly. And, of course, as part of that, digital lending has also grown. So, the RBI recommended increasing the risk weight for some of the loans, especially small-ticket loans, to moderate the growth. But I think the demand in the market is high, and fintech players like MobiKwik are meeting this demand for smaller ticket loans.
The growth should not be a challenge, but I think it’s a good marker that, eventually, everybody has to look at doing digital lending in the right way.
The increased cost of smaller ticket loans has already been taken into account. New lending norms were too small to impact what we’ve seen in the industry, bigger disruptions. Credit is the kind of lubricant that keeps the economy going, and it’s true for retail customers as well.
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First Published:24 Jan 2024, 06:12 PM IST
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