The document provides an overview of the digital credit card and credit ecosystem opportunities in India. It discusses: 1) Key statistics on India's economy, population, and digital penetration that demonstrate growth opportunities. 2) The growth of e-commerce in India, with projections that the market will reach $200 billion by 2026. 3) How major e-commerce players like Amazon and Flipkart are expanding credit offerings to drive sales. 4) The proposed "DigiCredit" ecosystem that would facilitate real-time credit approval and disbursement through multiple e-commerce platforms.

1. Digital Credit card –
Ecosystem &
Opportunities
Sriram Natarajan

2. India – Some Key Numbers
AGENDA
Overview: India E-commerce Market Growth
Credit Ecosystem offered by E-Commerce Players
Important Market Trends & Our Vision
Credit Card Evolution & What's Next
Appendix

3. India – Some Key
Numbers

4. India – Some Key Numbers
Source: Tradingeconomies | WorldPay | Fortumo | Livemint | Efina.org | Wikipedia
Macro Economics Indicators India (2016)
GDP $2.264 Trillion
GDP Per Capita 1862 USD
GDP Growth Rate 5.70%
Population 1299 Million
Unbanked Population 19%
Internet Penetration 29.54%
Smartphone Penetration 20%
Morgan Stanley Research, following are the expected growth by
2027
 GDP to reach US$6 Trillion (CAGR 10.24%, 2016- 2027)
 Equity market cap to rise to US$6.1 Trillion
 Market value of the financials to hit US$1.8 Trillion
 Market value of consumer sectors to hit US$2 Trillion

5. Overview:
India E-commerce Market
Growth

6. Overview: India E-commerce Market Projections
Source: Businessdayonline.com | Livemint.com | Thisdaylive.com | Worldpay
 India had 60 Million online shoppers in 2015, which is 14% of the internet user base of the country.
 There will be 50% rise in number internet users who will be shopping online by 2026.
 The anticipated retail e-commerce volume growth to 52.301 Million by 2022 in Indian retail market.
 In 2016, the sale of physical goods via digital channels in India amounted to 16.07 Billion US dollars in
revenues
2015
2026
23 Billion
200 Billion
The e-commerce market will grow at 30% CAGR and will reach $200 Billion of Gross Merchandise Value in 2026.
Indian E-commerce market forecast

7. E-commerce Players
Market Share Of Major E-commerce Players
Source: innovationiseverywhere | marketingedge | blog.zup.today
Bank Transfer, 24%
Cash on Delivery, 24%
Debit Card, 9%
eWallet, 26%
Prepaid, 3%
Credit Card, 12%
Prepay, 3%
Charge & Deferred Debit
Card, 3%
Other, 1%
POPULAR ALTERNATIVE PAYMENT METHODS
E-commerce Payment Methods
32.50%
39.50%
5.50%
4%
4%
14.50%
Amazon Flipkart Snapdeal Shopclues Paytm Others

8. Top E-Commerce Apps In India(In Terms Of Downloads)
Rank Apps Categories
1. General merchandise/Digital Wallets
2. General merchandise
3.
General merchandise
4.
General merchandise
5. Fashion/ Apparel
6.
Fashion/ Apparel
7.
Fashion/ Apparel
8.
General merchandise
9.
Fashion/ Apparel
10.
Fashion/ Apparel
Source: Morgan Stanley Report

9. Credit Ecosystem Offered by E-Commerce Players
 Till 2015, 70% of Indians remained under-served by banks and other financial institutions. There is a massive
opportunity for new age Fintech players to serve unbanked population.
 The E-Commerce organizations are stepping up their sales by offering to their customers Pay later options.
The first time borrowers with no credit history, so these Fintech players have around 80-90 parameters to
judge payback capability of their customers.
E-Commerce Offering Post Pay Features
ICICI Bank To Offer Small
Instant Credit To Paytm
Users
Grofers enables postpaid
billing for shopping for
select users
Amazon.in has introduced 'Buy
now pay next year' feature
(wherein the customers can buy products during
the Great Indian Festival sale and start paying for
it in instalments which will start only next year)
Source: Economics Times | Medianama | Quartz | LiveMint
Bajaj Finserve To Offer
Small Instant Credit to
Flipkart Customers

10. Digital Penetration Is All Pervasive Force – Brace For Exponential Growth
By 2020, internet users in India will be more than G7 population
2016
Number of people (Million)
600-650
Million
2020
G7
Internet users in India Population of
G7 countries
The number of internet users in the
country is likely to cross 650 Million
by 2020 – essentially half of India
will be online in the next 3 years. To
put it in perspective, in 2020, more
Indians will be online than the
population of all G7 countries put
together.
Source: BCG-Google report | Morgan Stanley
2020 650+
Million
390
Million
INDIA
2026 900+
Million
Internet Users In India
390
Million

11. Driving Forces For Exponential Growth In Digital Commerce
In 2020, more Indians will be online than the population of all the G7 countries put together.1
Affordable smartphone, cheap data and rising disposable income will provide explosive growth in Digital penetration in the country.2
77% of the population use mobile as a primary device to access internet. Mobile phone internet user penetration in India is projected to reach
37.36% of the population in 2021.
4
The smartphones are becoming cheaper year-on-year basis, in year 2016, average price of smartphone is $ 111 which is cheaper that prices in 2011 i.e.
$252
5
Internet users in India will reach 900+ Million in 2026 expanding at 8.27% CAGR from 2016.3
25% rise is expected in rural India internet penetration6
Mobile Phone Accessibility
Internet Penetration
Rural India Internet Penetration
Technology availability and uptake (even in rural India) - perfect bedrock for exponential growth in eCommerce is set
An Appropriate Credit Ecosystem Would be critical in Propelling This Growth

12. Important Market
Trends & Our Vision

13. Source: ngbm.net| statista
16.07
20.06
25
31.12
38
45.2
52.3
2016 2017 2018 2019 2020 2021 2022
Retail E-commerce Sales
Opportunity For An Online Underwriting Platform
• Need and Opportunity for E- commerce players to shift from discount based model to facilitating real time credit to customers to
enhance revenue
• Next logical step for the e-commerce players is to offer credit to attract customers as well as generate interest income to enhance
topline and bottomline
• A Digital Credit Ecosystem will be of great value to them
Online Retailers (specific categories –e.g., Electronics)
2016 Ecommerce Mix By Payment Methods
26%
24%
19%
12%
9%
3%
3%
3%
1%
eWallet
Bank Transfer
Cash On Delivery
Credit Card
Debit Card
Charge & Deferred Debit Card
Pre-Paid
PrePay
Other

14. Source: Worldpay| Livemint
Opportunity For An Online Underwriting Platform (Cont.1)
Pay In Installment Option By Airline
73%
27%
 As survey reveals 73% customers are interested in installments
given by airlines itself
 Massive opportunity for Airlines, Tours &Travel Aggregators to
facilitate credit to customers
 Several operators are likely to take up this opportunity and
start offering credit on the same or connected platforms
 High growth is seen from 60 to 73 Million travelers
 20.41% YoY growth rate between 2014 & ‘15
 A Digital Credit Ecosystem will be of great value to
them
Tours & Travels
60.94
73.38
5.87
7.32
Year- on- year (Y-0-Y) Month-on- month (M-0-M)
Passenger Growth
2014 2015
Passengers carried (in Million)
Growth YoY = +20.41%
MoM = +24.65%
Yes
No

15. Opportunity For An Online Underwriting Platform (Cont.2)
How P2P Lending works:
 The borrower submits an application for a loan
 The lending platform leverages technology and online data to quickly assess risk, figure
out a credit rating and assign an appropriate interest rate here is where our opportunity
will be, especially in the emerging markets & then in developed markets as well
 Potential lenders makes loan offers
 Investors can be individuals, private companies or financial institutions and typically
invest in many different loans to spread their risk
Global Marketplace Lending can reach $290 Billion by
2020 (Base Case)
Morgan Stanley estimates the current level to be even g
higher (at about USD 50 billion - GBP 38.5 Billion) and
expected CAGR to be 51% to reach USD 290 Billion in 2020
Global trend: P2P lending has increased from GBP 2.2 Million in
2012 to GPB 4.4 Billion in 2015
P2P is where people sign up to the platform as either a borrower or a
lender
51% Expected CAGR
2014- 2020
123&% CAGR
2010- 2014
Source: Company Data, Morgan Stanley Research
Global Marketplace Loan Issuance
Source: Worldpay| Livemint

16. • The lending market to consumer durables is likely to grow at around 24% per annum till FY21.
• Financed consumer durables purchase is poised to grow at a healthy pace of 21-24% per annum to reach Rs 1.9-2.1
Trillion in financial year 2021.
• Consumer durables offer higher margins given the high yields of 23-26% currently. However, operating cost is also high
at 10-11%, given the significant costs for collections and to some extent for client acquisition and so is credit cost at an
average of 2.5 -3.5%
Financial Year Percentage Rise
2021 40-45 (expected)
2017 32
2013 19
Consumer Durables Credit Facts
Source: economictimes

17. 17
Non-banking finance companies are on course to corner almost half of the lucrative consumer durables lending space by FY21
when this credit segment is slated to touch Rs 2 trillion, up from the present 32 per cent, says a report (ICRA)
The lending market to consumer durables is likely to grow at around 24 per cent per annum till FY21.
During the five-year period between FY13 and FY17, the share of the NBFCs in the consumer durables financing jumped to 32 per
cent in FY17 from 19 per cent in FY13, IcraBSE 0.33 % said in a report today.
NBFCs are expected to increase their share in the overall consumer durables financing to 40-45 per cent by FY21 from 32 per cent
in FY17 as more entities venture on to tap the consumer durables financing to improve their portfolio diversity and business yields
https://economictimes.indiatimes.com/news/economy/finance/nbfcs-may-grab-almost-50-of-consumer-durables-credit-by-
fy21/articleshow/62340174.cms
ICRA report on Consumer Durables Finance – key numbers
NBFCs are going to play an increasingly important role in this market

18. RBI To Regulate Peer-to-Peer Lending Firms
Source: Worldpay| Livemint
All peer-to-peer lending (P2P) platforms will be regulated by the Reserve Bank of India (RBI). The gazette notification
stated that all the P2P loan platforms will be treated as non-banking financial companies (NBFCs) and will be brought
under the ambit of the banking regulator.

19. Our Proposition: Digital Credit Ecosystem
DIGITAL ECOSYSTEM
Provides end-to-end
management of
real-time credit
facilitation online
All in Single
Platform
Allows lenders to
choose and bid for a
potential borrower
Provides
Customer KYC
& Credit
Scoring
Facilitates
credit
disbursement
through the
platform
Allows
borrowers to
choose from
multiple credit
offers
Can be
extended to
multiple
businesses
(beyond
Ecommerce)
Borrowers may
apply through
any ecommerce
platform
Facilitates post-
disbursement
services
Based on alterative data like social
media, ecommerce transactions, bank
statements, etc. – supplements even for
those on CIBIL
Repayments,
reminders, borrowers’
current state updates,
etc.
(with tie-ups) &
independently as well for
eKYC and credit rating –
for credit pre-approval
Emergency credit provisioning
(e.g. in hospitals)
Brick-and-mortar stores (through
QR Code)
Marketing platform with plenty
of digitally active customers
Lenders (Banks, NBFCs, P2P lenders,
etc.)
Ecommerce Companies (esp. small &
medium)
Borrowers (Ecommerce Customers
interested in credit)
Access to all the customers (who
want credit) of multiple
ecommerce platforms through
DIgiCredit

20. The Digicredit Ecosystem: Visualizing The High-level Architecture
Multiple Lenders
(Banks, NBFCs, P2P
Lenders)
Ecommerce
Customers
Customer interested
in credit
Credit Applicant with KYC &
credit rating
DigiCredit Ecosystem
(Customer KYC, Credit Rating,
Disbursal & Repayment
Facilitation, Long-term customer
management)
Credit
Disbursal
Repayment
Repayment
For Ecommerce Platforms: Manage a single point relationship with DigiCredit Ecosystem to facilitate multiple credit options for it’s
customers – enhance sales with minimal effort ]
For Lenders: Get qualified leads from multiple ecommerce platforms along with full KYC and credit rating
For Borrowers: Get access to credit for online purchases directly from the ecommerce platform they’re shopping on
A first of it’s kind product in Indian market to tap the huge growth potential of ecommerce here
Multiple Ecommerce
Platforms
(Any online commerce)
Payment through credit
Value Propositions

21. The Digicredit Ecosystem:
Personal Information:
Aadhaar, PAN, Bank Information
Credit Score from Credit Bureau
Financial Documents:
Bank statement, Salary slip
E-commerce Transaction Data
Social Media Data
Applicant Seed Information
Data Validation/
Verification via API/
Web login/ DB/ Third
Party
Compute Credit score
using preconfigured
scorecard on provided,
verified and validated
data
Issue DigiCredit* card
based on preconfigured
criteria
Based on score in
DigiCredit card, list of
lenders will be provided
to select.
DigiCredit Ecosystem Platform- KYC and Underwriting process – at a glance
Assuming that Digital card will be issued by DigiCredit Ecosystem

22. KYC and Underwriting process – Workflow Highlights
Validated
Compute Alt Credit
score
Subject to KYC and
credit score threshold
issue QPS DigiCredit*
card & share file with
lenders
Based on KYC, Alt
Credit Score, lender
specific criteria/rules,
send the applicant’s
detail to lenders /
make pre-configured
offer schedule available
to borrower to choose
Aadhaar* – Validation via UIDAI
API/Mobile OTP
PAN* – Validation via PAN API
KYC Authentication
Passport validation
Personal Information:
 Name, demographic,
 Contact information,
 employment information,
 Aadhaar, PAN,
 Bank Information
 Passport
Application
(coming through e-commerce partner sites)
Underwriting Process
API to get Credit Score from Credit
Bureau
Data from Partner/Third party
Profile data from multiple social
media logins (LinkedIn, Facebook,
Twitter etc...)
Social Media Logins
Financial Information
• E-Commerce Transaction Data
Credit Bureau Data
Preconfigured
Scorecard
Information shared
with Lenders
Additional Data/Info3
4
5
• Bank statements: Login with Net
banking/PDFs
• Bank account validation through
test transaction
• Salary slips: Upload salary slips
• IT Returns
• Audited financial returns
filing statements for self
employed
Digital signing of affidavit/declaration
2B
2A
2B
2A If validated, move to next step: Underwriting
If not validated, request more info from
applicant
1
2

23. • Credit score
• Loan amount
• Application Criteria
Application
Borrower
DigiCredit Ecosystem
Lenders
Lender specific criteria:
-
• Credit score cut-off
• Loan amount range
• Employment status
etc.
Application details, KYC and credit score
details as per the borrower & lender criteria
List of interested Lenders & their offers
Credit disbursal to the DigiCredit Card after
borrower accepts the offer
Repayment
DigiCredit card
Multiple Lenders
(Banks, NBFCs, P2P
Lenders)
Repayment
3A3B
1
2
4
5A
5B
The Digicredit Ecosystem: DigiCredit to Lenders process flow

24. New Customer on-boarding with Virtual Card
CUSTOMER
Complete the Regn.
Process in Mobile App
/ Web site
Decrypt and display
full Card # and Expiry
Date in Mobile App /
Website
Input the required
Demographic, Bank,
Document details and
submit
Perform Negative
listing checks against
External files/links
Send Virtual Card
# along with Expiry
Date & CVV as an
encrypted value
via API
Receives the
Customer Details via
API
CMS
Assign Credit Limit to
Card
Perform EKYC check
via API with Third
Party agency system
Create customer in
and assign Virtual
Card number
Compute credit limit
using preconfigured
score card
Perform Credit
Score check from
Credit Bureau
BANK / NBFC Receive applicant
complete details
Provide
preconfigured offers
to Customer
Select
required
offer
Create Loan account
in Loan Management
system
Physical cards having the same card number as the virtual card and PINs can be generated if required by the
customer

25. Transaction Flow and EMI conversion
CUSTOMER
PAYMENT
SCHEME
SWITCH
Visit the merchant
Store / Site
Receive SMS /
Email alert. View
Trxn record on
App / Portal
Perform the
Transaction
Send Decline
response and create
Trxn record
Send SMS /
Email alerts
Receives the
Authorization
Request
Validate Card #, CVV,
Expiry Date, PIN, Chip
Data etc.,
Receive the
Authorization
request
Routes the
Transaction to
Issuer
Is
Valid?
Send
Approve/Decline
response to
Scheme
Receive the response
code and send to
Merchant
Terminal/Website
Send Approval
response and
create Trxn record
Transaction auto
converted into EMI as
per Product setup
Apply Interest,
Installment Fee
CMS
Is
Valid?
Validate Card
status, Load limit,
Fraud Rule etc
No
Yes
No
Yes
Convert the Trxn
into required EMI
within 24 hrs
Conversi
on done
with 24
hrs?
Yes
No

26. Transaction Flow - Auto Repayment
CMS
CLEARING
HOUSE
BANK (BIN
SPONSOR)
CUSTOMER
Generate
Repayment File on
scheduled date
Transmit the
Repayment file
to Bank
Receive the file
and forward to
respective banks
Receive Credit
advise
Receive file, Debit
Customer account
and send credit
advise
Receive Debit
Settlement
Receive payment file and
post to Card using
Payment Allocation logic
(Interest, Fee, Principal)
Upload the
Repayment file
to Clearing
House
BANK
(CUSTOMER
SB A/C)
Send Debit to Bank
(Customer SB A/c) and
Send Credit to Bank
(BIN Sponsor)
Receive Credit
Settlement and send
file to Processor
Receive SMS / Email
alert for payment
confirmation on card

27. Transaction Flow – EMI Acceleration
CUSTOMER
CMS
Logs in to Mobile App
/ Website
Receive Acceleration
request via API
Select the EMI
transaction(s) and
Accelerate
Transaction with Total
Outstanding amount
and Fee gets displayed
BANK / NBFC
Create Customer list
for acceleration
(Delinquent and Risk
Customers)
Send for Acceleration
initiation via SFTP
Auto / Manually
accelerate the
requested or All EMI
transactions
Create 2 Transaction
records:
1) With O/S balance
with Interest
2) Acceleration Fee

28. Delinquency Status Change & Transaction Flow
CUSTOMER
CMS
Check for payment
entry on payment
due date
Payme
nt
recd?
No Change in
Card status
code
Change Card status
code to Delinquent
status code basis the
pre-configured buckets
Visit Merchant Store
or Website and
performs transaction
Receive
Authorization
request and check
Card status code
Send approval /
decline response
basis delinquency
predefined rule
Receive SMS/
Email alert for
auth response

29. Delinquency Repayment and Card Status Change
Apply payment
allocation logic
(Interest, Fee,
Principal) and post
Receive Payment
file from Bank
Initiate Payment to
Card through
NEFT/IMPS
Outstan
ding
Status
check
Change Card
status code back
to Normal
Fully settled
Partially
settled
CUSTOMER
CMS
BANK (BIN
SPONSOR)
Receive Payment,
Create file and
send to CMS
Change Card status
code to Delinquent
status code basis the
pre-configured buckets

30. Merchant Refund / Reversal Processing
CMS
PAYMENT
SCHEME
MERCHANT
Perform Refund
/ Reversal Trxn
Forward the
Clearing file
Download the
Clearing file from
Scheme portal
Process Chargeback
to return the Credit
Trxn. back to
acquirer
Is Card
valid in
CMS?
Upload the
Clearing file in
CMS
Apply payment
allocation logic
(Interest, Fee,
Principal) and post

31. Credit Card Evolution
And What's Next

32. Credit Card 1.0- Past
•Traditional plastic
• Magnetic strip
• Conventional underwriting process of issuing
Available only to
customers with
credit history and
good credit score
Fixed APR
(Very high)
Revolving Line
of credit
Only on physical
POS

33. Credit Card 2.0- Present
Available only to
customers with
credit history and
good credit score
Fixed APR
(Very high)
Revolving Line
of credit &
Instalment
credit on the
card
Online as well
as on physical
POS
•Traditional plastic
•Chip+Magnetic strip
•Conventional underwriting process of issuing

34. •Digital card (a number)
•Instantly underwritten & issued online
•Often uses alternative data
Technology adoption happens following a “Gradually,…then suddenly” pattern. This is readily extrapolated to credit card adoption,
There has been slow, gradual changes over last few decades and the credit card market appears ripe for the “sudden” tectonic shift
Variable &
customized
risk based
pricing
Available to customers
little credit history &
irrespective of
traditional credit score
Reaches a
much larger market
& aspirational
population
Online use
Credit Card 3.0- Future

35. What Next ?
• New channels to acquire customers
• Focus on reducing customer effort
Biometric based
underwriting
Credit linked with voice
based devices

36. Credit Card – Past, Present, and an Exciting Future (Summary)
•Traditional plastic
•Magnetic strip
•Conventional underwriting
process of issuing
•Traditional plastic
•Chip + Magnetic strip
•Conventional underwriting
process of issuing
• Digital card (a number)
• Instantly underwritten &
issued online
• Often uses alternative
data
• New channels to
acquire customers
• focus on reducing
customer effort
• Credit Card industry has remained pretty much the same at it’s core
for several decades.
• But it is about to be disrupted fundamentally with the advent of new
technologies very soon
Technology adoption happens following a “Gradually,…then suddenly” pattern. This is readily extrapolated to credit card adoption, There
has been slow, gradual changes over last few decades and the credit card market appears ripe for the “sudden” tectonic shift
Credit Card 1.0
Credit Card 3.0
Automation
Present Near FuturePast Next
Credit Card 2.0
• Only on physical PoS
• Revolving Line of credit
• Fixed APR (very high)
• Available only to customers
with credit history and good
credit score
• Online as well as on physical
PoS
• Revolving Line of credit &
Installment credit on the
card
• Fixed APR (Very high)
• Available only to customers
with credit history and good
credit score
• Online use
• Variable & customized risk
based pricing
• Available to customers little
credit history and
irrespective of traditional
credit score
• Reaches a much larger
market and aspirational
population
• Credit linked with voice
based devices
• Biometric based underwriting
What next?
Rapidly expanding market size

37. Appendix

38. Small Credit Market
Large population of credit hungry people who don’t have credit card
or credit history – NO access to credit from Banks/NBFCs
Several startup have already began working with the idea without
relevant or no scorecards
Untapped Market to capture with huge potential in Risk Analytics &
Easy To Deploy Credit Scoring
They often need fast and easy loans with minimal documentation &
quick disbursal
Massive opportunity for Small Ticket loans
Big potential for small ticket loans with easy access for emerging markets like India
Source -http://seekingalpha.com/article/69859-credit-cards-by
• Credit card trend across different age groups
• Likely to capture young age market .
Source -http://seekingalpha.com/article/69859-credit-cards-by-
country
How credit card holders compare:
United States
5 Cards per person
Brazil
2.5 people per card
Russia
5.9 people per card
China
33 people per card
India
64.6 people per card
Preference in Payment Type By Age Group

39. Success Stories
First Movers
Global Examples
• Brazilian wholesaler Grupo Martins started a
joint venture with a Brazilian bank to lend to
small consumer-goods retailers.
• JBS launched Banco JBS in 2008 (now known as
Banco Original S.A.) to provide financing to
farmers and other suppliers.
• Alibaba,has created a credit score it calls “Ali-
loan,” derived from the transactions conducted
on its portal. It then sells this score to lenders.
• Lending Club the industry leader, founded in
2007, has gone on to issue over $9 billion in
loans. Their site has the best user interface and
the largest 3rd-party investor ecosystem.
• Prosper made history when they launched in
2006. They were the first ever American peer
to peer lending company.
Some questions for the Industry:
1. Do the investors fully understand the risks?
lending marketplaces are platforms – the risk of
the loan is on the lender. Therefore, it is important
to assess the credit rating process of a platform
before you sign up as an investor.
2. Is it too young?
The industry is still nascent and while default
rates have been lower than the credit card
industry, the timeframe is not large enough to
reach a definitive conclusion.

40. Morgan Stanley- Facts
and Figures

41. GDP • Nominal GDP US$6.0 Trillion; F2017-27 CAGR -10%
• India to achieve upper middle income status byF2027; GNI per capita to rise from US$ 1,702 in F2017 to
US$ 4,135
Total Loans • 78%of GDP vs. 67% in F2017
• 10Y CAGR at 12% (US$ terms), driven by MSME and consumer lending
Mutual Funds AUM • US$ 1.9 Trillion; 10Y CAGR at 22% CAGR
• Pickup in domestic financial savings; DREAM factors
Insurance Premiums • Life insurance-US$185 Billion;10Y CAGR at ~12% Penetration to improve to 3.1% from 2.7%
• Non-Life-Insurance-US$59 Billion ;10Y CAGR at ~13%; Penetration to improve to 1.0% from 0.8%
Digital Payments • Overall digital penetration to move from 5% of GDP to ~20% in 10Y
• Share of new infrastructure- UPI wallets and RUPAY cards in digital payment to rise from 15% to ~ 70% in
next 10Y
E-Commerce • eCommerce grows to ~US$200 Billion 10Y CAGR at ~30%
• Led by rising and more mature internet population, improving payment infrastructure and credit availability
to suppliers
Market Turnover (Cash) • ~ 15% CAGR over the next 10 Y
• Turnover/market Cap to rise from ~55% to 75% in next 10Y
Market Cap (Financials) • Grows to US$ 1.8 Billion by F2027E; ~4x from current levels
• Earnings growth + new listings
Market Cap (Overall) • US$ 1Trillion; 10Y CAGR at 11%
• Sensex at 100,000; 10Y CAGR at 12%
• Earnings growth + multiple expansion
Source: RBI (Reserve Bank of India), NHB (National Housing Board), IRDA (Insurance Regulatory and Development Authority), CEIC, AMFI, NPCI, NSE, BSE, Bloomberg, Morgan Stanley Research (E) estimates
India in F2027:
The Power of Compounding Is Likely to Be Seen Across the Economy & Markets

42. 5%
7%
8% 8%
9%
15%
16%
19% 19%
25%
27%
30%
32% 32%
44%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Cross Country Comparison:
• By comparing, India with other markets, digital payments in India (even after the F17 pickup) have lagged those in most markets. The estimation was
payments as a percentage of GDP and also payments as a percentage of national personal consumption expenditure - on both counts, India has lagged.
• It is expected it to increase to around 20% of GDP by F2027, implying a CAGR of ~30% for the next ten years.
Digital Payments as a Percentage of GDP

43. Rs Billion Mix
F2012 F2017 CAGR F2027e CAGR F2012 F2017 F2027e
Housing Loans 6,193 14,754 19% 65,343 16% 56.8% 60.8% 58.8%
Banks 3,971 8,601 17% 29,320 13% 36.4% 35.4% 26.4%
HFCs 2,222 6,153 23% 36,023 19% 20.4% 25.4% 32.4%
Non Housing Loans 4,701 9,519 15% 45,694 17% 43.2% 39.2% 41.2%
Banks 3,858 7,599 15% 32,142 16% 35.4% 31.3% 28.9%
NBFCs 843 1,920 18% 13,552 22% 7.7% 7.9% 12.2%
Non Housing Loans (Product Wise)
Auto Loans (Banks only) 891 1,705 14% 7,212 16% 8.2% 7.0% 6.5%
Credit Loans (Banks only) 204 521 21% 2,205 16% 1.9% 2.1% 2.0%
Other Retail Loans 3,606 7,292 15% 36,277 17% 33.1% 30.0% 32.7%
Banks 2,763 5,373 14% 22,725 16% 25.4% 22.1% 20.5%
NBFCs 843 1,920 18% 13,552 22% 7.7% 7.9% 12.2%
Total 10,893 24,273 17% 111,037 16% 100.0% 100.0% 100.0%
As % of GDP 12.5% 15.9% NA 25.1% NA
Consumer Loan Mix Across Key Loan Products and Forecasts
 Given that housing will be around 60% of total retail loans and it runs off at ~14% every year, the annual
originations needed by F2027 will be around Rs40 Trillion compared to around Rs9 Trillion in F2017 (16% CAGR)
.
 Given nominal GDP growth at ~11% and the focus on consumer loans, this should be achievable

44. Annual New Loan Originations in Consumer Sector Likely To Be ~9% of
GDP by F2027 and Grow 4.5x to Rs 40 Trillion by F2027
Annual New Loan Originations In Consumer Sector

45. Thank You!
Q & A