Fintech firms fear disruption as Jio Financial readies entry plan

economictimes.indiatimes.com:

Jio Financial Services gets demerged from Reliance Industries. Looking at the Reliance playbook, be it in telecoms or retail, it is obvious that Jio Financial will try to take the services to the masses, multiple industry insiders said.

With the group’s wide reach and its deep pocket, its full-fledged entry could disrupt the market where many of its rivals would be fledgling fintech players. “The obvious attempt would be to go after the consumer lending opportunity, leverage the Jio user base and the presence of large format retail stores to create a strong distribution channel,” said a senior executive at a major venture capital firm with a large exposure to the Indian fintech sector.

“They can track the data, use it for underwriting and create attractive offers for consumers, they can play a role in financial inclusion,” said the founder of another major lending startup. “With the Jio app, they can showcase offers to their users and incentivise them to transact through the app.” While consumer lending can be one part of the business, Reliance has a strong presence in the business-to-business commerce space too, through Reliance Market.

Reliance Market started back in 2011 has around 4 million members who are served through 52 stores.Impact on fintech startups If Jio gets the execution right, there will be a major competitor for fintech startups. Indian fintech founders have carved out a niche for themselves in consumer lending and they fear that Jio might try to grab a large chunk of that.

“Knowing them I think they will mostly go after the mass market. Most of the startups are focusing on the middle-income layer consumers, which should keep them safe, but yes there is a big challenge coming up,” said the founder of a