India : Promoting Research and Innovation through Development of Fintech Institute at GIFT

Education / Tertiary

Finance / Inclusive finance - Infrastructure finance and investment funds

Information and communication technology / ICT industries and ICT-enabled services - ICT strategy and policy, and capacity development

GIFT City is a joint initiative of the GOI and the Government of Gujarat focused on developing India's financial services and fintech ecosystem. Set up in India's first international finance service center, GIFT is now ranked at par with other global financial centers. Several leading financial institutions, technology companies, market infrastructure firms, alternate investment funds, and other ancillary service providers have already set up shops at GIFT. Gujarat is ranked among the top performing states in India for developing the local start-up ecosystem as it introduced several tax benefits and financial incentives to attract financial institutions and fintechs to GIFT City.

The project aims to meet the gap for the emerging skills in sectors, such as fintech, as one of the key approaches to reduce poverty and inequality (operational priority 1) in ADB's Strategy 2030. Under the country partnership strategy for India, 2018-2022, ADB seeks to tackle skills gap in support of industrialization with a view of boosting economic competitiveness to create more and better jobs (pillar 1). The proposed project will build on the existing strengths of GIFT City and explore creating a Network Effect Model wherein stakeholders (academic institutions, governments, incubators, accelerators, start-ups, etc.) in the ecosystem collaborate for mutual benefit, thereby creating a collective ecosystem impact.

As of 2022, India has the third largest fintech ecosystem globally and is benchmarked for growth, innovation, and inclusion. Fintech has unbundled financial services and created solutionsespecially in payments, lending, and insurancefor the underserved in the country. This has led to greater financial access, more informed choices, better financial outcomes, increased opportunities, and resilience for women and low-income groups in India. As of June 2022, the market size of Indian fintech industry was $584 billion (3% of India's GDP). It is expected to grow at a compound annual growth rate of 31% (during 20212025) to reach $1.3 trillion in 2025 and will play a key role in achieving India's goal of becoming a $5-trillion economy.

While significant progress has been achieved in fintech, both consumers and private players in the sector continue to face challenges. This include low availability of skilled resources for the fintech industry, lack of quality mentorship, access to finance, or access to market and support to startup firms, low expenditure in research and development, weak incubation and acceleration, as well as skills mismatch. The proposed project for the development of a fintech institute at GIFT aims to promote research innovation and support interventions towards resolving these challenges.

Inclusive and sustainable development of fintech ecosystem (Sustainable vision 2030 for Gujarat)

Industry aligned education, start-up and research and innovation in the fintech sector strengthened

Climate-resilient and inclusive international fintech institute and residential facilities developed

Industry-aligned fintech training programs designed and delivered

Conducive fintech ecosystem developed to support start-up incubation and acceleration

Applied research and development supported to facilitate innovation in solutions and technologies to promote industry adoption of fintech

Institutional capacity strengthened through development of operating systems and business models