BigFive Virtual Summit: The Future is Fintech

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At the recent BigFive Virtual Summit (November 2020), India’s “youngest billionaire”, fintech entrepreneur Nikhil Kamath shared his views on fintech trends, public policy, the global economic recovery, and the prospects for a cashless society with BigFive Digital Co-founder Paul Plant.

 

Nikhil has launched numerous FinTech ventures in Asia and MENA through his Bangalore-based incubator Rainmatter.


Nikhil was a precocious entrepreneur. He began trading equities at 17 and started a wealth management firm at 19. A year later he launched the online stock trading platform Zerodha with his brother. In 2019, he founded a Mauritius-based hedge fund called True Beacon


P2P is the Next Wave in Fintech

Nikhil believes the startup energy is moving away from mobile-wallet based companies to companies that can figure out how to make capital more accessible to both individuals and small businesses. This includes peer-to-peer lending platforms. This is particularly true in India and its neighboring countries, where the recent United Payments Interface (UPI) initiative has simplified the payments infrastructure, reducing the need for mobile wallets. 

 

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"Now we are seeing a drift in focus from wallets," Nikhil said. "And the opportunities here now lie in lending." In particular, Nikhil anticipates peer-to-peer lending startups will start popping up over the next year. 


While Nikhil was speaking specifically about Southeast Asia, his prediction has resonance in the Middle East and Africa as well, whereas many as two-thirds of sub-Saharan Africans remain unbanked. 


Nikhil is also very bullish on the question of going cashless.


“In India, the cashless component has gone up significantly. In China and Singapore, they are almost there, if they are not there already. I think it will soon be cashless around the world. And by soon, I mean within a decade."


Strong Public Policy Views


The conversation also touched on several public policy issues. For example, he believes tax simplification will help economies return to growth in the post-COVID era. 



Perhaps Nikhil's most controversial remarks involved income inequality. Despite his own status as a billionaire, Nikhil expressed strong support for wealth and inheritance taxes as a tool for reducing income inequality. He advocates an inheritance tax of 30% to 40%, without the usual loopholes. 


"If the rate of growth of capital assets continues to be greater than wage growth, then the poor will continue to get poorer."



Overall Nikhil believes entrepreneurs and corporations will play a central role in re-energizing post-COVID economies. And it will start with having the confidence to invest. 


"We need to move away from fear and start feeling more optimistic about the world," Nikhil said. "On a larger level, that is the only thing that will make a difference."

 


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