The International Financial Services Centres Authority (IFSCA) has launched the IFSCA FinTech Incentive Scheme to provide financial support to fintech activities in the form of specific grants. The overall objective is to promote the establishment of a world-class fintech hub at the Gujarat International Finance Tech-city (GIFT IFSCA) in India.
The scheme was notified through the Gazette Notification number IFSCA/2021-22/GN/022 dated 2 February 2022. According to a press release, the initiative will be open to:
- Domestic fintechs seeking access to overseas markets.
- Domestic fintechs seeking listing on IFSCA-recognised stock exchanges.
- Foreign fintechs seeking market access to IFSCA in India and work within the IFSCA’s regulatory framework.
- Foreign fintechs seeking access to the domestic market under the inter-operable regulatory sandbox (IORS) framework.
- Domestic fintechs extending business to the IFSCA either by way of authorisation or registration or through the regulatory sandbox.
The types of incentives for eligible applicants are:
Fintech Start-up Grant: this will be utilised to develop a product or a service and related ‘go-to market’ initiatives for a start-up with a novel fintech idea or solution with a focus on converting the idea into an MVP.
Proof of Concept (PoC) Grant: this will be utilised to conduct a PoC by an early or mature fintech entity (FE) in domestic markets or overseas.
Sandbox Grant: this will be utilised by FEs to experiment with innovative products or services in a sandbox.
Green Fintech Grant: this will be utilised towards developing solutions facilitating sustainable finance and sustainability-linked finance, including environmental, social, and governance (ESG) investments.
Accelerator Grant: this will be utilised to support accelerators at the IFSC for capacity building, building capabilities around mentors, and bringing investors/projects or PoC, tie-ups, etc.
Listing Support Grant: this will support domestic FEs aspiring to go for listing on stock exchanges recognised by IFSCA.
The grants contemplated under this scheme shall be available to eligible FEs who are part of the IFSCA’s Regulatory or innovative sandbox, or who are referred to the IFSCA under a fintech bridge arrangement with a counterpart regulator. Further, FEs that have either participated or are participating in any accelerator or cohort, or special programme supported or recognised by the IFSCA. Also, FEs who are referred to by the entities, including regulatory or supervisory bodies that have a memorandum of understanding (MoU) or special arrangement with the IFSCA.
In April, the India Post Payments Bank (IPPB), an agency under the Department of Posts (DoP), launched an initiative, Fincluvation, to create and innovate solutions for financial inclusion by collaborating with the country’s fintech start-up community.
As OpenGov Asia reported, Fincluvation is an “industry-first” initiative to serve as a powerful platform to mobilise the start-up community to build meaningful products that will broaden the reach of digital finance. With a combination of IPPB’s technology stack, DoP’s doorstep service network, and the techno-functional acumen of start-ups, the products of the initiative can deliver unmatched value to the citizens of the country. Successful pilots from the initiative can then mature into long-term partnerships.
The global fintech market size was $110.57 billion in 2020 and is estimated to grow to $698.48 billion by 2030, growing at a CAGR of 20.3% from 2021 to 2030. Fintech increases the speed, transparency, and security of transactions, which is why governments and organisations around the world are looking to support, foster, and fund fintech solutions.
