The fintech companies appear to be worried, courtesy the reports of the impending entry of Jio Financials in the market. An anxious lot of digital lending startups and their investors are said to be watching from the sidelines as Jio Financial Services gets demerged from Reliance Industries. What is worrying fintech players is Reliance Group’s wide reach and its deep pocket.
The company’s entry both in retail and telecom segments led to a disruption in these spaces. If the Jio Financials follows the same playbook, it means it will try to take the services to the masses, multiple industry insiders told Economic Times (ET). Reliance Jio changed India’s telecom industry forever with its entry in September 2016. The company announced unlimited 4G data for its customers under its ‘Welcome Offer’, Since then there has been no looking back, and India continues to have one of the lowest internet data rates globally.
It seems to be a wait and watch for most fintech startups as of now. For, none of the fintech founders and investors that ET spoke to went on record, given that Jio itself has not made its business plans public. They are in a wait-and-watch mode, but nervousness is reported to be quite palpable in the sector.
RIL-Jio Financial demerger
Reliance has announced the demerger of its financial services business into Reliance Strategic Investments as part of its group restructuring. The spun-off entity has been renamed Jio Financial Services, which will be listed soon. The demerger of the financial services business involves a spin-off of Reliance Industries’ 6.1% treasury shares.